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Its no to a wealth tax and yes to tax breaks for home solar – Kieswetter
Edward Kieswetter, Commissioner of the SA Revenue Service
- SARS commissioner Edward Kieswetter says the time is not right to increase the burden on taxpayers.
- New taxes are not needed now as compliance measures bear fruit.
- Households should be given incentives to install their own energy generation.
- For more financial news, go to the News24 Business front page.
SA Revenue Service (SARS) commissioner Edward Kieswetter says that tax compliance measures are paying off so well that he and the National Treasury agree there is no need to impose new taxes now.
Kieswetter was speaking at the PSG Think Big series on Tuesday.
In two weeks Finance Minister Enoch Godongwana will table the national budget, the only occasion on which changes to tax policy can be made. Tax policy is the sole prerogative of the finance minister, and is not determined by SARS.
However, Kieswetter said that there was general agreement with the Treasury that the direction of taxes, particularly for companies, should follow international trends and be downwards. There was also plenty of room to further increase tax compliance, which is still relatively low, and a new tax – like a wealth tax – was not necessary or advisable.
Said Kieswetter:
We have many low-hanging fruits to improve revenue collection, which has, of course, been buoyed by the occasional uplift in the mining or the financial sector. But those things will even out over time. The real benefit for us is the significant growth we have seen in what we call the compliance dividend, meaning the additional revenue we have been able to collect, notwithstanding economic circumstances.
Compliance measures involved closer scrutiny of a sample of 8% of tax returns, only a quarter of which qualified for closer scrutiny, had prevented the outflow of R42 billion in impermissible refunds last year, he said.
While the idea of a wealth tax has been bandied about, “we are of the view that the compliance dividend reduces the pressure or the need for any other taxes… Our collective mindset right now is to look rather at improving our administrative competence and not to increase the burden on people,” he said.
Kieswetter said he would also like to see tax incentives or concessions to households for investment in their own energy generation or even zero rating on products that offer alternative energy solutions.
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“The last amendment to policy in respect of renewable energy was made in 2016 when companies were allowed accelerate the depreciation on renewable energy over one year, which effectively means a 28% discount on your investment.
“When that was introduced, we would not have known or been aware of the extent to which the energy crisis would have regressed and what other instruments we would need to respond to it.
“And, so I believe and have been engaged already by colleagues in the Treasury to say, we should be reviewing additional measures to provide some relief and incentive for people to make an investment in their own become a little bit more self-sufficient. “