There are massive challenges in the way tax is collected - Judge Dennis Davis

Finance Minister Malusi Gigaba announced on Tuesday that President Jacob Zuma has agreed to his request for an urgent inquiry into governance and tax administration at the South African Revenue Services (Sars).

Gigaba says that this inquiry will help to assess reasons for under-collection by Sars, and what needs to be done to improve this.

READ: President Jacob Zuma gives the go ahead on Sars investigation

ALSO READ: Political desk: Difficult to understand what Gigaba is up to

This year, Sars is reported to have missed its first quarter tax revenue target by R13.1 billion.

Stephen Grootes spoke to Judge Dennis Davis, chairperson of the Davis Tax Committee, on what the issues are affecting governance and tax collection at Sars.

It is clear that the minister is anxious about the fact that once you get a medium term budget and you declare that you are 50 down on what his predecessor had budgeted for then that's a problem and you ave got to try and work out what it is.

Judge Dennis Davis, chairperson of the Davis Tax Committee

A pretty fine tax expert suggesting that about 18 billion of that 50 could be explained by way of a decline in the economy but the rest could be all other things, for example did treasury get it right? Is there a degree of declining tax morality? Is Sars up for the job? All of those questions are up for grabs and if you were the minister you would want to know.

Judge Dennis Davis, chairperson of the Davis Tax Committee

Davis says there are massive challenges in the way in which tax is collected and that unless we fix the public morality in the country difficulties in that area will continue.

I do think that the issue of corruption and continuing allegations of state capture are having a very foundational effect on tax morality in South Africa, I am not suggesting there aren't issues to be dealt with in Sars but I am certain that unless we fix the public morality in this country we are going to have a problem on the tax side.

Judge Dennis Davis, chairperson of the Davis Tax Committee

Click on the link below to listen to the full audio....


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