This sector in South Africa is a nightmare for SARS

[DreamKing]

I can see that you know nothing about VAT. VAT isn't paid the same by everyone. Businesses that have few input costs pay more in VAT because they don't get any deductions on the stuff they buy.

https://en.wikipedia.org/wiki/Value-added_tax

And it needs a huge paperwork compliance to actually function. And businesses can make a conscious decision to not pay it, which causes enforcement problems.

With the bank transaction tax, the only people who have to do the work for tax collection are the banks who process the payments. That means SARS only need to work with 63 organisations instead of the millions of businesses.
https://www.advratings.com/south-africa#:~:text=There are 63 banks operating,are the new challenger banks.

that will cause huge job losses .................

................ for sars.

 

[Lupus]

And also some chunks of the formal market are moving that way as well from my recent experience.

SARS should largely be shytting itself if the formal market is starting to dabble in cash to avoid the tax obligations.

Oh yeah seen it as well, restaurants give a bit of a discount with cash.

 

[ToxicBunny]

Oh yeah seen it as well, restaurants give a bit of a discount with cash.

So for me thats been in play for a long time, I'm talking bigger businesses that do transactions into the 10's and even 100s of thousands of rands. I've had 2 largish personal transactions recently where the supplier straight up offered a large cash discount without me even asking for it.

 

[LCBXX]

With all the talk of tax revolts etc to protest squandering of tax by the ANC, what make SARS think that the informal-trading and taxi industries will be lured to registering with SARS?

First things, first.

 

[Quicks]

I am all for this less money for the ANC scumbags to steal. But at the same time would like the Taxi industry to suffer as well. Meh you can never win.

 

[A3@MBB]

It's almost like civilization is like a machine, where most cogs need to work for the other cogs to work, and everything depends on everything. Take away electricity, internet, postal services, literacy and it looks like it might affect tax collection. Fancy that.

Tax collection was successfully done by kings and heads of tribes hundred of years ago on all members within their realm.
Was it always fair and equal to income, perhaps not.
But your head would have rolled if you did not comply.

People need discipline for a successful civilization/country to run

 

[Lupus]

So for me thats been in play for a long time, I'm talking bigger businesses that do transactions into the 10's and even 100s of thousands of rands. I've had 2 largish personal transactions recently where the supplier straight up offered a large cash discount without me even asking for it.

Oh never seen it in the 10s of thousands, that is scary.

 

[BeerIsNotGood...]

Only because they are stuck in the 1920s with the way they collect taxes.

The obvious solution is to get rid of all taxes and replace them with two taxes. A tax on bank transactions and a tax on cash withdrawals and deposits. Informal sector of the economy will pay tax when it interacts with the formal sector.

Then allow everyone a minimum wage worth of free bank transactions (so you can receive and pay R3600 every month without paying any transaction tax), but this is done via a tax return. Poor people are then exempt from taxes, whilst everyone else gradually pays.

So basically NIT?

 

[konfab]

So basically NIT?

You mean a negative income tax? No, you don't get the refund unless you actually do the transactions.

But, on that front, they should start requiring bank accounts for social grants. Currently it is just optional.

 

[DapperDanMan]

As someone who used to know a taxi boss, those guys do not mess around.

They can easily organize via whatsapp and probably take down the Sars offices

Ironic that the Taxing peoples and Taxi peoples do not mingle at all.

 

[BeerIsNotGood...]

You mean a negative income tax? No, you don't get the refund unless you actually do the transactions.

But, on that front, they should start requiring bank accounts for social grants. Currently it is just optional.

Sounds even better

 

[deweyzeph]

The problem is informal traders by their very nature deal in cash only and seldom have bank accounts, expensive cars, own property, or do anything else to appear on SARS's radar. So long as cash is involved and the informal traders do not live lavish lifestyles under the radar of SARS's intelligence gathering machine, there is very little they can do. I doubt most informal traders even earn much above the tax threshold.