Commission of inquiry into Sars tax under-collection

FINANCE Minister Malusi Gigaba announced yesterday that President Jacob Zuma has agreed to establish an urgent commission of inquiry into tax revenue collection and governance at the South African Revenue Service (Sars).

Gigaba said he had informed Sars commissioner Tom Moyane, who expressed his support and willingness to co-operate.

“We expect this inquiry to be constructive and to strengthen the institution further where possible.

“It is critical for government to determine the cause of the tax revenue under-collection in order to enable government to take urgent remedial steps to ensure that Sars is able to meet its revenue targets as set out in the Medium Term Budget Policy Statement (MTBPS) and budget,” said Gigaba after meeting the SAA board.

Gigaba’s MTBPS he presented in Parliament last month showed that Sars had under-collected R50 billion in tax revenue.

Political parties lashed out at Gigaba over the tax shortfall, with opposition parties calling for Moyane’s head.

Another revenue under-collection would pose risks and weaken tax administration, he said. “The inquiry will help to assess what factors are responsible for the under-collection of revenue by Sars, and what steps need to be taken to improve performance management systems at Sars to improve its capacity to collect revenue.

“The MTBPS recognised that while the economic cycle is the most likely and significant factor driving lower revenue-collection, other factors could also be at play, like weakening tax morality and challenges facing tax administration.

“Whatever the reason for such a shortfall, the risk of under-collection of revenue impacts directly on the size of the future budget deficits and hence on the sustainability of the projected debt-to-GDP trend, and directly on our credit rating and growth prospects.” – ANA

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‘Sars commissioner Moyane shows willingness to co-operate.’