Tension Builds Up Between SA's Finance Minister and Revenue Department About Imposition of Additional VAT
South African Revenue Service (Sars) Commissioner Edward Kieswetter did not back down in his views against hiking taxes, when he spoke and facilitated a panel discussion at a side event recently during the meeting of G20 finance ministers and central bank governors in Cape Town.
Kieswetter’s utterances were made exactly a week after Finance Minister Enoch Godongwana’s controversial budget proposal, in which he proposed raising VAT by two percentage points.
The move was met with significant backlash from various political parties and the public, leading to the postponement of the tabling of the 2025 budget.
Kieswetter’s remarks at the G20 event corresponded with comments he had made weeks ago during a webinar in which he cautioned against the assumption that higher tax rates automatically result in increased tax revenues. He however has expressed similar views several times over the years.
Kieswetter noted that investment in improving the country’s tax administration is a better option for revenue collection. The remarks were not well received by Godongwana. The finance minister was reportedly annoyed by Kieswetter’s repeated assertions that improving tax collection infrastructure is more effective than raising taxes.
