Taxman faces tough time with NGOs

Barry Streek The South African Revenue Service (Sars) and the Department of Social Development face an administrative nightmare as they work with NGOs to speed up service delivery to the poor. A survey conducted by Socila Surveys shows there are more than 101?000 NGOs in the country a figure that could pose challenges to the capacity of the government departments. Sars is expected to gear up its tax processing system in anticipation of the proposed extension of tax incentives to non-profit organisations.
The social development department, however, has a responsibility to disburse millions of rands from fundraising initiatives such the Lotto to charity organisations.

Mark Kingon, head of the special tax division at Sars, says he only has four staff members to deal with NGOs although he had advertised for four more people. Kingon says he needs about 60 people to handle the new tax incentives.

Kingon estimates that more than 50?000 NGOs could apply for the exemptions, but this figure might be too low as there are about 30 000 organisations in the religious field alone. The Department of Social Development had previously estimated the number of NGOs at about 80 000, but other reports had given a lower figure. “Most of us completely underesti-mated the size of this sector and the government will have to take us more seriously,” said Bev Russell, the managing director of Social Surveys. The figure of 101 000 NGOs was based on an analysis of organisations in 40 communities, selected nationally. Russell said the researchers first targeted civic leaders, local authorities, schools, women’s associations, youth associations, welfare departments, clinics and hospitals, and media before moving into a door-to-door trawling phase. The full results of the survey will be released later in the year as part of international research coordinated by Johns Hopkins University in the United States. The estimate of 101?000 is certainly the highest given, despite the closure of some NGOs since 1994. “The informal segment of the sector is usually largely undetected and previous studies have been biased towards the bigger, more formal organisations. Informal organisations are often transient, working at community level adjunct to more formal public- or private-sector institutions. These organisations are hidden from easy identification and often the same organisation is known by different names,” Russell said.

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