Kingon aiming for 20% rise in tax revenue

SA lagging behind compared to Brics partners, he says

ACTING SARS commissioner Mark Kingon says he wants to see the revenue service increase its collection by 20% – and key to doing that is “effective service” and enforcing “perceptions that there is a real risk” to non-compliance.

“My mandate is very clear: try and deliver to government as best as possible the revenue that it needs.

“I want to see a 1.5% growth rate, we’ve had a contraction like Russia has, but a 20% growth in revenue. That’s what I want to see. Because there is scope to do it. We know the tax gap is out there,” he said.

“I need to be driving compliance with service . . . but I also need to be driving compliance with people’s perception that there’s a risk to not comply. We are not there at the moment.”

Kingon said South Africa was “lagging behind” in tax collection when compared to its Brics counterparts.

“Russia is getting a 17% increase in revenue. We are lagging behind. India has a growth rate of 7.5% but they’re seeing a tax growth rate of over 17%.

“Russia’s growth was 1.5% but they’re seeing a tax growth rate of 20% because they’re serving their clients better and they’re bringing in a new VAT system, which I would love to bring in. But that’s obviously a tax policy thing.”

Speaking after a press conference that outlined the outcomes of meetings between Brics tax authorities and experts in Sandton this week, Kingon again acknowledged that public perception that SARS was a “captured” or legally compromised institution had had a damaging impact on tax compliance.

And he admits this perception has been driven by an absence of effective SARS legal action against tax cheats over the past few years.

“We all know that there’s tax fraud happening, so where are the cases?

“In fact, I walked around our Megawatt Park offices this past week and I went into the criminal investigation unit . . . just to find out where they are. And I said: Where are we? Where are these cases? And they showed me. There is work happening, we’ve got to get it completed and get it into the justice system.”

Kingon also believes reconfiguring SARS processes in dealing with large business may be a key driver in increasing tax revenue.

He says the revenue service is currently “running a project” that he hopes will significantly improve the service offered to big business.

“I’m hoping to make formal announcements in the next few months,” he said.

Last year saw growing uncertainty over whether collection of customs duties at South Africa’s borders would remain in the hands of SARS or be moved to Home Affairs.

“People need to realise how integrated Customs is into the broader SARS environment. I was looking the other day and we collect – just via OR Tambo International Airport – R33-billion in customs duties and import VAT. You’ve got to have that integrated into the broader SARS equation.” —