Lack of capacity widens tax gap � BURS
Isaac Pinielo | Wednesday March 30, 2016 18:00
In the 2015 annual report released recently, commissioner general Ken Morris said inadequate capacity to undertake more enforcement activities to cover all areas of the country is one of the constraints that the agency faces.
Morris cited constraints such as public ignorance of the importance of tax which translated into low compliance levels, as well as the lack of an enterprise risk management function for increased efficiency in collection.
He said BURS continued to make efforts to overcome the constraints, increase efficiency and achieve more with limited resources.
Despite the challenges, the tax collecting agency recorded an increase in tax collection for the 2014/15 financial year, collecting P37.5 billion compared to P32 billion collected during the 2013/14 financial year.
This reflects an increase of P5.5 billion or 17.1 percent in collections compared to the 7.2 percent increase recorded in the previous financial year.
The commissioner general also noted that the increase is a result of a positive growth across all types of tax during the financial year, with an increase of 15 percent for income tax from P13.1 billion to P15.9 billion and value added tax (VAT) by 17.2 percent from P5 billion to P5.9 billion. The Southern African Customs Union (SACU) receipts also grew by 19.1 percent from P13.2 billion to P15.7 billion.
As a percentage of gross domestic product (GDP), tax revenue collections showed upward and consistent growth from 20.9 percent in 2010/11 to 25.1 percent in 2014/15.
Since inception, Morris said BURS’ tax revenues as a percentage of GDP have consistently hovered around 25 percent, generally indicating that collections roughly follow GDP growth.
During the year under review, the agency introduced e-filing for the VAT as a way of improving service and reducing the burden on taxpayers.
“However, there has been a slow uptake of the use of e-services as most taxpayers continue to file manually,” Morris said.
He added that a marketing campaign to encourage more taxpayers to utilise the services will be embarked on as part of the coming year’s e-services projects that will also see other tax types being included.
According to Morris, BURS still experiences a lack of proper office space, accommodation, and infrastructure at some of its service centres, regional offices and border posts, which he said has a negative impact on employees’ motivation and productivity.
“There are also administrative and logistical problems relating to issues of maintenance of the border post facilities,” he said.
He further stated that aggressive initiatives for development of infrastructure and planned outsourcing of maintenance will address these issues over the remaining years of their strategic plan.