Personal tax has always been just that – but campaigners in South Africa want to make the tax filings of every citizen public.
The Alternative Information and Development Centre (AIDC) argues that secrecy has led to major flaws in tax administration and may allow some money to go astray or remain uncollected.
AIDC’s data showed that the net loss for South African public finances for the five years from 2014 to 2018 due to underperformance in tax collections came to R158 billion in real terms – an average of R32 billion a year.
The NGO said that there was a need for the creation of a public registry of beneficial ownership for all types of companies, land and assets in South Africa.
Failure to collect taxes
“The AIDC proposes the establishment, in steps, of national records accessible both online and in municipal buildings where all South African citizens’ tax returns will be available,” AIDC said.
“In addition to this, the creation of a public registry of beneficial ownership for all types of companies, land and assets in South Africa. The publication of country-by-country, subsidiary-by-subsidiary reports all large companies operating in South Africa in an easily accessible database.”
The proposal was part of the AIDC submission to the Zondo Commission of Inquiry into State Capture.
The idea comes at a time when the government faces criticism for failing to collect all the taxes that are due.
Ministers are also blamed for squandering tax money that could be spent on improving basic services, such as health, education and infrastructure.
For South Africa expats, this proposal, if adopted, could add to mounting tax issues that will come into play next year when the South African Revenue Service (SARS) starts taxing income earned overseas.
Not only do expats fear huge tax bills if they remain tax-tied to South Africa, but their personal financial affairs could become public as well.
Many working in low or zero-tax locations, such as Dubai, are considering tax migration as the only way to avoid the new 40% tax on all salaries topping R1 million that are earned abroad, even if the money does not flow into South Africa.