BURS seeks to widen tax base
Isaac Pinielo | Wednesday October 7, 2015 18:00
The tax gap is described as the difference between the tax revenue that should be collected and the tax revenue actually collected.
BURS commissioner general, Ken Morris told the third sitting of the parliamentary committee on statutory bodies and state enterprises yesterday that the tax gap remains a challenge for the tax collector.
He attributed this to tax evasion and tax avoidance as well as ineffective tax revenue collection. The commissioner noted that the BURS is working on a tax gap analysis, which is expected to come up with a tax gap reduction strategy.
Recently, the BURS indicated that it would intensify its tax collections. With this year’s reduction in the diamond and SACU revenues, economists suggest that there might be a possible tax increase.
During the period April 1, 2014 to March 31, 2015, BURS collected tax revenues amounting to P37.5 billion against a target of P35.8 billion. The actual revenue collection exceeded the target by P1.7 billion or 4.85 percent. Of the three revenue streams, income tax was the most bullish as it exceeded the target by P2.1 billion or 15 percent. Revenue performances for the value added tax (VAT) and customs receipts were subdued for the period under review as they fell short of targets by P66.6 million or 1.1 percent and P248.4 million or 1.55 percent, respectively.
According to Morris, a shortfall in SACU receipts is attributed to the appreciation of the Botswana Pula against the South African Rand.
BURS annual revenue collections grew from P11.8 billion to P37.5 billion in 2014-2015 period representing an annual average increase of about P25.7 billion in nine years, which translates to 28.6 percent. During the period of April 1, 2015, BURS collected tax revenues amounting to P15 billion against a target of P15.3 billion.
The actual revenue fell short of the target by P311 million or two percent. Of the three revenue streams, customs receipts exceeded the target by P239 million or 3.5 percent. Revenue performance for income tax and VAT fell short of targets by P4 million or 0.1 percent and P546 million or 19.8 percent respectively.
The subdued income tax performance was attributed to less than targeted mineral tax receipts for July and August 2015.
On the other hand, poor performance of VAT is attributed largely to the increasing trend in refunds, which accounted for approximately 40 percent of gross VAT collections for the period in question.