NEDLAC CONSTITUENCIES SUPPORT TAX AMNESTY AND CALLS FOR TAX MORALITY

31 October 1996

Nedlac's constituencies in the Public Finance and Monetary Policy Chamber have come out in support of government's decision to extend the tax-amnesty period from 1 November 1996 to 28 February 1997.

The extension is supported for two reasons:

• With many billions currently escaping the tax net, the amnesty could play a role in persuading more people to become part of the tax-collection system.
• As more people start paying tax, government's ability will be strengthened to structure the tax system in such a way that it focuses more on the issue of greater social equity associated with increased economic growth.

However, the constituencies feel this should be the final extension of the amnesty period so that the morale of existing taxpayers is not further undermined.

The amnesty should be accompanied by a proactive awareness-raising campaign which explains the concept of amnesty and how it operates. Nedlac supports government's decision to clamp down on tax evaders and its attempts to strengthen the capacity of the South African Revenue Services (SARS). Nedlac also supports measures to increase the SARS's effectiveness and efficiency, including a greater degree of autonomy for the SARS.

Nedlac is examining how it might contribute to the development of greater tax morality among its constituencies through a public-education programme planned for early next year. It is envisaged that this programme could address issues such as why a person has to pay tax, which services government provides in return for the taxes paid, the role of the employer in collecting tax, how tax is deducted from a person's income, when a person is liable for paying tax, et cetera.