The SA Revenue Service (Sars) has over the years noted an increasing level of indebtedness to it by government departments and state-owned companies (SOCs), finance minister Enoch Godongwana says.
While the vast majority of the 5,303 entities paid their debts on time, 404 entities owe Sars R5.9bn for the 2023/24 fiscal year, the minister said in a written reply to a parliamentary question by FF+ MP Wouter Wessels.
This debt comprises R2.4bn in PAYE and R3.5bn in VAT.
“Of the R5.9bn debt R1bn is under dispute, leaving a balance of R4.9bn undisputed of which R2.9bn is older than three years,” the minister said.
A total of 92% of departments and public entities pay their PAYE, VAT and other tax obligations on time.
“Sars records have over the years noted an increasing level of departments and SOCs’ indebtedness to Sars. There is no correlation between the current cost containment measures and the increase in the departments and SOCs’ inability to pay their tax obligations over to Sars.
“This will be monitored closely in the coming months to observe trends post the implementation of the cost containment measures,” Godongwana said, referring to the cost-cutting measures that National Treasury has imposed on government departments due to fiscal constraints.
Godongwana said Sars’ debt collection processes were employed for defaulting taxpayers and arrangements made to ensure the debt is settled within a reasonable time where feasible.
“Engagements with [the] National Treasury to deduct from grants the necessary amounts to settle taxes owed to Sars have been evoked as the last resort following lack of co-operation or lack of positive response from defaulting taxpayers.
“It is genuinely concerning for state organs not to comply with the very tax laws that generate revenue that enables them to exist in order to delivery on their respective mandates of rendering public service to SA citizens who are the taxpaying community.”
Godongwana noted that at the end of the first quarter of the 2023/24 fiscal year, all state departments and public entities had paid their dues to the Government Employees Pension Fund (GEPF) on behalf of their employees.
“The data indicates that 99.90% of the total monthly pension contributions due were received and reconciled punctually as mandated by the relevant legislation. The minor discrepancy of 0.10% does not reflect arrears from any particular state department or public entity but rather pertains to adjustments necessitated by various scenarios such as service termination or changes in service conditions.
“The financial impact represented by the 0.10% discrepancy is being analysed and resolved on a regular basis. The administrator conducts a reconciliation process which is a routine and rigorous part of ensuring compliance and accuracy in the contributions made to the fund.”
Godongwana said all relevant state departments and public entities had maintained a consistent track record of timely contributions to the GEPF, irrespective of the fiscal situation.
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