30,000 companies forced to apply for tax directives in face of business rescue
SARS commissioner Edward Kieswetter says that some businesses "may never come back".
South African Revenue Service (SARS) commissioner Edward Kieswetter told 702 that 30,000 companies have been forced to apply for tax directives in the face of business rescue and liquidation.
He said that the economy is likely to contract by around seven percent in 2020, which will lead to a decline in revenue collection as it is linked to the economy.
He pointed out that during lockdown, the economy, which had already been under strain, “came to a stop”. As a result, some businesses “may never come back, and that is a loss of economic capacity”.
During the first quarter of 2020, the combination of the weak economy and Covid-19 lockdown resulted in companies looking at drastic measures to cut costs, including job cuts and some entering business rescue.
Kieswetter said that the revenue collection agency has seen a ‘steady number’ of retrenchments, companies applying for tax directives, as well as businesses applying for business rescue and liquidation.