The South African Revenue Service (Sars) has warned of a devastating impact on the country’s economic capacity due to the effects of the COVID-19.
The agency estimates that it will lose between 15% and 20% of its revenue collection due to the sluggish economy and effects of the pandemic.
Addressing Parliament’s joint finance committee, Sars Commissioner Edward Kieswetter explained that most of the businesses going under would likely not reopen their doors nor would lost jobs be regained.
While there are generally fears that the impact of the COVID-19 is yet to be felt in South Africa, both on a human and an economic level, Kieswetter said that they were worried about the long-term impact.
The percentage of estimated loss of revenue amounts to R285 billion, which the country is in desperate need of.
Kieswetter said that while Sars was not involved in the politics and rationale of the lockdown as the government proceeds on a risk-based approach to open the economy, indications are that businesses and South Africans are under strain.