Blue Chip Journal Issue 76

On the money
Making waves this quarter
SARS Commissioner breathes sigh of relief
The Minister of Finance delivered an Emergency Budget in June
2020, which can be described in diplomatic terms as gloomy
and uneventful. Most notably, despite speculation by some to
the contrary, the Minister did not impose any new taxes, which
leaves SARS with no respite as it faces a mighty revenue shortfall
of around R300-billion.
The Minister has indicated that the funds will be sourced by
other means, seemingly letting SARS off the hook to a degree.
From here onwards, one foresees SARS embarking on two possible
paths in the coming fiscal year, or a hybrid of the two.
The obvious, but difficult, answer to this equation is to try
to stem the tide by prioritising collections – most taxpayers
and their tax advisors appear to expect SARS to be extremely
aggressive in its collection of taxes in the coming months, given
the government’s desperate need for more funds.
SARS may take an alternative approach to the crisis. It may
decide to not participate in Covid-19, instead of deploying its
resources to extract taxes from a limping tax base, it may use the
year of famine as an opportunity. The Commissioner has lamented
the lack of capacity within SARS. If SARS uses this opportunity
wisely, we may just see a more resilient and assertive revenue
authority emerging from the debris of the pandemic.
• By Jean du Toit, Admitted Attorney & Head of Tax Technical at Tax
Consulting SA
Balancing economy and health
Infections in the country’s economic heartland of Gauteng
appear to be on the rise. On the economic front, the Emergency
Budget tabled in June by Minister Tito Mboweni makes the dire
fiscal reality very clear. The economic devastation caused by the
lockdown has reduced tax collections while increasing calls on
the fiscus. Reducing the economic burden on citizens and their
dependents is critical not least from a socio-political viewpoint:
if people cannot discharge their obligations to dependants, civil
disobedience may follow.
REBUILDING THE SOCIAL COMPACT
To combine economic revitalisation and health or safety, the
government must successfully transfer responsibility from the
state (lockdown and all its attendant laws) to civil society, both
individuals and corporates. This is a difficult exercise to pull off
at the best of times, but the government has squandered a lot of
the trust it originally enjoyed. The public has grown cynical about
the myriad regulations that have eroded trust.
Perhaps most important of all, the extreme slowness with
which the much-heralded aid to citizens and companies has been
rolled out, and the growing suspicion that corruption is occurring,
has reduced the propensity to follow the government playbook.
The government has consistently indicated that Covid-19 is with
us for the foreseeable future, yet its plans have seemed ad hoc and
short term in focus. If civil society can be convinced that a long-term
and carefully constructed plan exists, then we may yet win through.
• By Professor Rashied Small, Executive: Centre of Future Excellence
(CoFE), South African Institute of Professional Accountants (SAIPA)
Construction industry hit hard
The construction industry has been touted as one of the key sectors the
government should prioritise to ramp up job opportunities to revive the
South African economy. It’s an industry employing hundreds of thousands
of workers that was hit hard by the Covid-19 pandemic. There have been
suggestions that the impact could result in a year-on-year contraction of
18%, which represents 4% of GDP.
Potentially, this could mean the loss
of up to 140 000 formal jobs, according
to construction market intelligence firm
Industry Insight.
In response to Covid-19, the construction
sector has formed a Construction Sector
Covid-19 Task Team composed of contractors,
built professional services firms,
property developers, regulators, professional
associations and manufacturers.
It has submitted a comprehensive shortto
medium-term plan to the government
for actionable reforms to help the sector
recover and is working with the government to develop an industryspecific
Covid-19 Construction Health & Safety Protocol.
Cobus Bedeker (above), MD of Evergreen Property Investments, says:
“The construction sector is already working together to ensure the
sustainability of this industry over the coming months to play its part in
our country’s economic recovery.
“There are huge opportunities in this property class in South Africa,”
says Bedeker. “Too many of our elderly population are living in inadequate
homes when they could be living in an estate offering a sense of support
along with a ream of services and amenities.”
10 www.bluechipdigital.co.za