The brand of Sars has been tainted. It is now associated with frustration, lack of trust, and “pay back my money”.
How does Sars bring taxpayers back on board and re-earn their trust and support? No one will deny that we have to pay our taxes, but surely that should also apply to the various criminals who over the last few years have been let off the hook? How does Sars again become a leading tax collection agency?
Mark Kingon, the interim acting commissioner, has been handed a poisoned chalice. He will have to negotiate a tricky path between a fractured organisation and disillusioned stakeholders, building bridges and smoothing down ruffled feathers. And, taking a firm stand against the tax avoiders and evaders, and smugglers of goods.
Sars is facing a few critical problems:
1. The first item on the agenda for consideration is the contentious “restructuring” of Sars, termed the new Sars Operating Model by Moyane. Minister Pravin Gordhan tried to halt this when he was finance minister. There is no need to go into a mud-slinging contest and point fingers at individuals who may or may not have any knowledge of tax. Sars should engage an external independent organisation to determine the tax knowledge, including hands-on essential knowledge, of the highest ranked 150 staff members. This should include senior managers, executives and chief officers, and anyone who is a member of a decision making committee.
The organisation engaged to carryout this task should be at the forefront of tax education, and be staffed with tax experts who have hands-on tax experience. And no, it should not be one of those foreign management consulting firms.
The initial survey can be very quick, a simple multiple choice questionnaire will suffice.
2. To regain taxpayer trust, Sars should introduce a mandatory certification for its staff similar to the requirements of a tax practitioner. After all, why should tax practitioners have to jump hoops to be registered, but the suffering taxpayer has no assurance that they are dealing with a competent tax auditor or call centre agent?
Again, an external organisation should grant the certification. The staff who should be certified should include anyone who has any say in the audit of a taxpayer. This should include the person who determines the tax risk, the auditor, the official who reviews the audit, or anyone who has any decision-making powers in regard to an assessment, objection, or appeal.
3.Those critical business units that were demolished during Moyane’s reign should be reinstated, such as the Large Business Centre and the investigative and forensic units. Auditing large complex multinational groups, tackling tax evasion and going after tobacco smugglers requires specialist skills and knowledge. Yes, and bring back the much maligned “rogue” unit, as well as the auditors, managers and executives who were hounded out.
4. There is a massive skills gap. There is no attempt to support/mentor/upskill staff who are promoted into positions beyond their expertise. No Sars, those fancy expensive executive training courses that you send your top managers on do not do much for tax administration nor tax knowledge.
5. There is very little bread and butter training. Everybody wants to be trained in the sexy areas such as transfer pricing and tax avoidance. But they are left high and dry when it comes to drafting an inquiry letter to a taxpayer, or setting out the reasons for disallowing an objection or appeal. Or understanding the very basics of the area in which they operate.
6. There are structural issues which date prior to Moyane’s time, for example, the reliance on a “risk engine” which supposedly detects all risks. Very annoyingly, this risk engine picks up non-risks, but the auditor has to launch an audit, and the poor taxpayer has to suffer the consequences. And Sars, why do taxpayers have to resubmit documents? Again and again and again? Are you losing documentation?
7. Abolish bonuses forthwith! Bonuses have created a culture of entitlement – and do not encourage staff to work harder. No, staff actually have to waste some 20% of their time documenting work done and “achievements” met. And another 10% of time is spent fighting off the parasites who are desperate to hive off results for themselves. Bonuses should be awarded for going that extra mile, not for simply doing a job well. Abolishing bonuses will save money, plus, the experts who are employed to design and monitor the expensive time-consuming computer system to track employee targets can be replaced with tax experts who can add to the bottom line.
8. Lastly, are all of the Sars departments essential to the running of a tax administration? A cold unemotional assessment should be carried out. Taxpayers should not have to support an inefficient ballooning organisation.
Kingon will be looking to the Sars executive committee for support, or not. Let us not forget that they were all appointed by Moyane. Now they will have to change allegiance and dance to a different tune. Either way, Sars will rise up through this, with, or without them. How long it will take is the question.