It does not just add up that the private sector, which boasts one of the biggest corporates in Africa and the world in both the financial and resources sectors, contributes less than 20 percent to the national fiscus, Economic Freedom Front’s (EFF) parliamentary Chief Whip, Floyd Shivambu said.
In a statement, he said the situation exposed SARS’ inefficiency. “We strongly believe South African revenue Services (SARS) is dismally failing to collect maximum revenue from the private sector.”
The less than R200 billion which SARS collected from the private sector was only a fraction of the real contribution, Shivambu reasoned.
He singled out mining companies as the worst tax evasion culprits. “The contribution of the mining sector in the national revenue is less than R25 billion, despite the fact that South Africa is richest country in the world in terms of mineral resources.”
Shivambu mentioned transfer pricing, base erosion and profit transfers as some of the means mining companies used to evade tax.
Ironically, recently, the President of the EFF, Julius Malema, pleaded guilty to tax evasion and agreed to settle his arrears with SARS on terms. He was said to have failed to declare tax returns for income generated from his construction business.