Personal income tax administrative reforms: Enhancing tax collection by the South African Revenue Services (SARS)

Abstract

Sound public policy and state action is imperative for South Africa to expand its economy to grow sustainably and competitively, raise skills levels and continue spending on crucial social and economic investment programmes, aimed at improving the standard of living of all citizens. The provision of revenue to fund such initiatives is largely dependent on an efficient tax revenue institution which can generate state revenue through taxation, while it does not raise the overall tax burden on income taxpayers. This article reviews the efficacy of personal income tax administrative reforms within the context of tax administration in South Africa, as a strategy to enhance tax revenue collection by South African Revenue Services (SARS). Legislative prescriptions and the policy mandate of SARS, which give effect to these reforms are also reviewed. Furthermore, the challenges impeding expected outcomes are highlighted. The article suggests that a critique of such challenges can promote effective and efficient personal income tax administration, which will ultimately benefit taxpayers and government in South Africa.