It is evident that those who brave the traffic and eagerly await Friday’s are the heroes of the tax community.
The major sources of tax revenue contributing to the Tax Cookie Jar
- Personal Income Tax (PIT) – 40%
- Value Added Tax (VAT) – 26.5%
- Corporate Income Tax (CIT) – 17.4%
- Other Taxes – 16.1%
Will the sources of tax revenue change in the future?
According to trusted sources, the mix of tax revenue sources for the South African fiscus is likely to change over time. The core pillars, personal income tax, value added tax and corporate tax will be dominant with small changes.
The change will be gradual, driven by:
- Economic change
- Technological changes
- Demographic and Political changes
- Global trends
The article presented in this edition is an introduction to Taxes and Accounting. We plan to write daily articles on Tax and Accounting as they are closely related to each other.
If we consider the drivers of change , we will explain each in detail and request your input related to the above mentioned.
Accounting has been transformed by technology, the bookkeepers function has changed from a number cruncher to a financial specialist. Understanding the impact of tax enforcement and the ethics in accounting is of the utmost importance.
Let’s discuss and introduce the four points that will contribute to the differing changes in tax in future.
Economic
South Africa is dependent on personal income tax (PIT) but why is this risky?
- The tax base is narrow (few high earners pay most PIT)
- High unemployment will reduce PIT growth
The future plan will seek broader consumption taxes (VAT) or devise new taxes.
Technological Changes
SARS is using AI and Data Analytics to improve compliance.
- Closing tax gaps
- Reducing evasion
- Expending compliance
