05/10/2026
𝗛𝗼𝘄 𝗰𝗮𝗻 𝘄𝗲 𝗺𝗮𝗸𝗲 𝘀𝘂𝗿𝗲 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝗽𝗮𝘆 𝘁𝗵𝗲𝗶𝗿 𝗳𝗮𝗶𝗿 𝘀𝗵𝗮𝗿𝗲 𝗼𝗳 𝘁𝗮𝘅?
A new SA-TIED policy brief explores this question in South Africa and highlights ways tax authorities can improve tax collection while making compliance easier for businesses.
Using tax return and audit data from 2016-2020, the brief identifies four priorities:
✅ 𝗙𝗼𝗰𝘂𝘀 𝗲𝗻𝗳𝗼𝗿𝗰𝗲𝗺𝗲𝗻𝘁 𝘄𝗵𝗲𝗿𝗲 𝘁𝗵𝗲 𝗯𝗶𝗴𝗴𝗲𝘀𝘁 𝗿𝗲𝘃𝗲𝗻𝘂𝗲 𝗴𝗮𝗶𝗻𝘀 𝗮𝗿𝗲 𝗹𝗶𝗸𝗲𝗹𝘆. Construction accounts for more than one-fifth of the estimated unpaid corporate tax, while even small amounts of underreported tax among large companies can add up to significant revenue losses.
✅ 𝗠𝗮𝗸𝗲 𝗶𝘁 𝗲𝗮𝘀𝗶𝗲𝗿 𝗳𝗼𝗿 𝘀𝗺𝗮𝗹𝗹 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀 𝘁𝗼 𝗰𝗼𝗺𝗽𝗹𝘆. Simpler procedures, clearer guidance and proportionate enforcement can help businesses meet their tax obligations.
✅ 𝗦𝘁𝗿𝗲𝗻𝗴𝘁𝗵𝗲𝗻 𝗺𝗲𝗮𝘀𝘂𝗿𝗲𝘀 𝗮𝗴𝗮𝗶𝗻𝘀𝘁 𝘁𝗮𝘅 𝗮𝘃𝗼𝗶𝗱𝗮𝗻𝗰𝗲. Some companies, particularly multinationals, may reduce their tax bills through complex arrangements that are not fully captured in audit data, pointing to a need for legislative and treaty reforms.
✅ 𝗠𝗼𝗻𝗶𝘁𝗼𝗿 𝘁𝗮𝘅 𝗶𝗻𝗰𝗲𝗻𝘁𝗶𝘃𝗲𝘀 𝗺𝗼𝗿𝗲 𝗰𝗹𝗼𝘀𝗲𝗹𝘆. Special economic zone tax benefits can encourage investment, but governments should also ensure that firms receiving them meet eligibility requirements.
A key takeaway is that the firms most likely to underpay tax are not always the ones responsible for the largest revenue losses. Effective enforcement requires looking at both the likelihood of non-compliance and the amount of revenue at stake.
Read the policy brief: https://go.unu.edu/FYR57
