The rebuilding of the South African Revenue Service (Sars) is one of the major focus points of government over the medium term.
One of the contributing factors to the lower than expected revenue collections in 2019 has been the weakened state the tax collector finds itself in after years of capture under the former commissioner.
The appointment of Edward Kieswetter as the new commissioner has already led to greater focus on stabilising the organisation, and efforts have been made to restore integrity and compliance functions, as well as employee confidence and public trust.
“Revenue recovery plans include assistance from the re-established Davis Tax Committee to address tax leakages, customs fraud, trade mispricing and harmful tax practices.”
Wealthy South Africans will receive far more attention, especially those with complex tax structures. There is also renewed focus on illicit and criminal activity, including non-compliance of religious public-benefit organisations.
Government will also publish a discussion document by June this year to look at amendments to further strengthen governance at Sars.
A number of senior officials implicated during the commission of inquiry into tax administration and governance at Sars have left, and experienced staff have returned to roles from which they had been moved.
“Strengthening Sars will take time, but will result in improved revenue collections in the years ahead,” Treasury said in the budget review.
Another positive announcement in this year’s budget is the news that the independence of the Office of the Tax Ombud will be increased by separating it financially and operationally from Sars.