Attacks on SARS ‘bad for compliance’
• Taxpayer compliance is declining, commissioner says
Unwarranted and unsubstantiated attacks on SARS had a negative effect on tax compliance and could sabotage the economy, commissioner Tom Moyane warned in Parliament.
Unwarranted and unsubstantiated attacks on the South African Revenue Service (SARS) are negatively affecting tax compliance and could sabotage the economy, commissioner Tom Moyane has warned.
Any loss of confidence in the tax authority would jeopardise the achievement of the 2016-17 tax targets, the commissioner said on Tuesday in reply to questions by members of Parliament’s standing committee on finance. If revenue collection was impaired, the country would suffer damage.
Moyane said the frequent negative comments about SARS in the media were extremely damaging to the institution. They portrayed an inaccurate picture of an organisation that was falling apart.
The “onslaught” on the integrity of SARS was beginning to have a negative effect on taxpayers’ confidence in the tax system. “We are seeing the beginning of a disturbing trend, whereby tax compliance levels are beginning to deteriorate.
“We are already contending with dire local and global economic conditions which impact on our economy and our revenue-collection ability.
“The drop in confidence in SARS is clearly noticeable” from the heightened engagements with taxpayers that took place at the end of the tax year.
“Any compliance drop would impact negatively on the attainment of the 2016-17 tax revenue estimate of R1.144-trillion,” Moyane said. “It has the potential to adversely affect the overall fiscal framework of SA.”
The significant downturn in the economy had required a revision of the tax revenue target for the year and was not due to SARS’ lack of capability.
Moyane said the damaging comments had also had a negative effect on staff morale.
“This tale of SARS having lost all its technical competence will play itself out as a self-fulfilling prophecy as many of our staff are highly marketable and will not tolerate their reputations being impugned in this manner,” Moyane said.
He would not reply to a question by DA finance spokesman David Maynier about the metaphorical state of “civil war” that existed between him and Finance Minister Pravin Gordhan, as in his understanding “civil war” connoted deaths and blood on the floor.
However, Moyane said he was appointed by President Jacob Zuma “and the lines of accountability are clear”.
Moyane said the investigation by legal firm Hogan Lovells into the R1.2m allegedly deposited into the bank account of SARS second-in-command Jonas Makwakwa was still under way. As the allegations related to the period of 2010-16, this in-depth probe would be lengthy. “The matter is ongoing,” he said.
The case of SARS deputy director of law Vlok Symington was also under investigation. Symington was “held hostage” in a boardroom in the SARS head office in October by the Hawks and Moyane’s bodyguards in a bid to retrieve an incriminating e-mail from Moyane reportedly sent by accident. The Hawks investigation related to its case against Gordhan.
Regarding the negative comments about SARS attributed by media reports to Judge Dennis Davis, Moyane said they were “an attack and affront” to SARS.
SARS only issued a statement four days after the comments were published, leaving Davis sufficient time to demand corrections if he had been quoted incorrectly, Moyane said.
“We gave the judge the opportunity to respond as to whether it [the report] was accurate or not.” The judge did say he had been misquoted.
THE SIGNIFICANT DOWNTURN IN THE ECONOMY HAD REQUIRED A REVISION OF THE TAX REVENUE TARGET FOR THE YEAR