Speaking at the 46th annual International Association of Financial Executives World Congress held in Cape Town, the South African Revenue Service (SARS)’s commissioner, Tom Moyane, said business reputations are on the line with citizens seeing the shirking of tax responsibilities as something that would impact both their social services and their tax in future.
“It is your role as a chief financial officer and board member that is most closely related to the tax function of your organisation to ensure that its approach, whatever it might be, is implemented within the bounds of the law. If tax is not already on the boardroom agenda in your organisation, it should be,” he said.
Moyane also said enterprises should treat tax governance and tax compliance as important elements of their oversight and broader risk management systems.
In particular, corporate boards must adopt tax risk management strategies to ensure that the financial, regulatory and reputational risks associated with taxation are fully identified and evaluated.
The government proposed new tax measures amounting to R13 billion in the 2017/18 financial year.
Combined with the higher taxes signalled in this year’s budget, total revenue increases are expected to amount to R43bn over the next two years.
The higher taxes outlined in this year’s budget comprised higher excise duties, an increase in the fuel levy and other environmental taxes, and adjustments to capital gains tax and transfer duty.
This would allow for higher income earners to shift into a higher tax bracket and would also contribute to the fiscus.
Moyane said the high unemployment rate had put a damper on collecting revenue.
“It is a bit concerning when you have a high unemployment rate, especially among the youth who should participate in the economy.
“It deprives us of generating revenue,” he added.