Sars gets large injection to improve technology infrastructure

Also starts legal processes to recover unwarranted expenditure.
The revenue service may in time get its own governance board and inspector-general. Image: Shutterstock

The South African Revenue Service (Sars) has been given a huge injection of R3 billion to improve its technology infrastructure and artificial intelligence capabilities.

The tax authority has been nearly decimated by years of capture under former commissioner Tom Moyane, impacting on its ability to collect taxes desperately needed to fund service delivery.

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The additional spending will also be used to expand and improve the use of data analytics and to participate meaningfully in global tax compliance initiatives.

“A digitalised Sars is intended to lower costs of compliance, simplify tax administration and improve collections,” National Treasury says in the 2021 Budget Review.

The Commission of Inquiry into Tax Administration and Governance by Sars (the Nugent Commission) was appointed to look at the institutional damage and governance failures done to the once world-class tax agency.

In the end it made 27 recommendations to address these failures at the institution. According to Treasury, current Sars Commissioner Edward Kieswetter has implemented 14 of these recommendations.

The commissioner said publicly that Sars required R800 million to address its technological and skills needs.

The boost of R3 billion therefore shows a real commitment by government to restore Sars to its former strength.

Efforts in this regard have so far included the re-establishment of the Large Business Centre as well as the units focusing on litigation, compliance and integrity. The performance of the previous executive committee was reviewed, and operational policies related to Vat refunds, settlements, and debt collection contracts are being amended.

Case files handed over

Sars has also started legal processes to recover unwarranted expenditure and has handed over case files on persons identified in the Nugent Commission’s report.

The inter-agency working group on criminal and illicit economic activities has completed 117 investigations, resulting in additional revenue of R2.7 billion.

Customs and excise operations are reducing the illicit movement of goods across borders, assisted by specialised cargo scanners, resulting in 3 393 seizures valued at R1.5 billion for the fiscal year to January 2021.

Treasury says Sars will continue its focus on consolidating wealth data for taxpayers through third-party information. This includes bank accounts, and information supplied by estate agents and financial institutions.

“This will assist in broadening the tax base, improving tax compliance and assessing the feasibility of a wealth tax.”

Governance changes for Sars

Treasury will soon publish a discussion document proposing legislative amendments to Sars’s governance. The publication of the document has been delayed due to the Covid-19 pandemic.

The document outlines processes to appoint and remove a commissioner, and the establishment of at least two deputy commissioner roles as well as an executive committee.

It also considers measures to improve governance and integrity in oversight processes, including the feasibility of a governance board, an inspector-general and mechanisms to account to the minister of finance.

Read: Sars abuses wide powers of debt recovery

In recent times several changes has also been made to the Tax Administration Act that increase the possibility of taxpayers being criminally charged for certain offences. This includes the wilful or negligent act of not alerting Sars to any changes to a taxpayer’s personal information such as a change of address.

This could result in a two-year jail sentence or a fine. The change has been introduced to ensure more success in the courts when taxpayers are being charged with non-compliance.

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R 3 Billion for IT and AI, under the Zuma administration we would not see much for the R 3 Billion or even a R 100 Billion.

All this to selectively monitor the Tax payers.

Mansions in Dubai, Tax payer Money in Dubai Banks and in Pakistani Banks does not get checked.

‘This include [sic] bank accounts, and information supplied by estate agents and financial institutions.’

Based on what is in the public domain, car dealers and jewellery stores should be required to supply quite detailed information too.

Forgive my scepticism but i wonder who is going to win this tender?

It seems that even the current SARS management are truly slovenly the final Nugent report was handed to Ramaphosa in December 2018 and yet SARS have only managed to put to bed 17 of the 27 recommendations – at this rate they may complete the changes by 2025. Even the best SoE is lethargic

The state promises each year how they are going eradicate unemployment. They had the 5 point plan and then the 9 point plan and each year the unemployment keeps on rising with not one point being implemented. The same goes for the crime rate which keeps on rising. Cele himself promised that he has plans to bring down the Farm murders. It was only talk. So one can go on and on with all the SOEs.
So 17 out of 25 is brilliant. I would give Edward Kieswetter a medal if it was up to me.

I hope that the bulk of the funds goes to Customs to curb the illicit trade especially of cigarettes, alcohol and medicines

The upside-down pyramid (tax base) has been running on empty for some time now. 2 things come to mind: 1: Who’s getting to pocket from this upgrade? Someone will make a billion profit. 2: What excuse will they have after finally admitting that corruption took place? Will they blame Jan van Riebeeck, Zuma, or Caster?

Translation: someone quoted SARS R3bn to build their “special Flash browser” and the bill is due.

…the Russian browser, for SARS. With security issues.

How much fringe benefits tax was paid on the fire pool in Nkandla? SARS should investigate the ANC leadership before trying to fine a lowly exporter with a few spare bob offshore earning zero interest with minimal loss to the fiscus who, squander the money on BEE procurement deals, tenders, generals salaries and over employing at SOEs.

…the public would like to see Zuma’s SARS Assessments between 2010 to 2018 tax years, please SARS.

End of comments.

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