Sars reaches its R1 trillion target

RELUCTANCE: PERSONAL INCOME TAX ‘UNDERPERFORMS’

VAT fraud, reports of integrity erosion two big worries.

The South African Revenue Service (Sars) has reached their target of over R1 trillion during the 2016-17 fiscal year despite a deteriorating rate of tax compliance levels.

Speaking alongside new Finance Minister Malusi Gigaba and Deputy Minister Sfiso Buthelezi, Sars Commissioner Tom Moyane said R1.114 trillion was collected, exceeding the revised estimate by R300 000.

He said the “outstanding achievement” was on the back of a slow 0.3% growth in the GDP announced by Stats SA last month, but that the personal income tax (PIT) underperformed by R15.2 billion.

“The growth of PIT, year to date, has declined from levels exceeding 12% to about 9% as a result of lower settlements, containment of bonus payments and job shedding.

“Media statements inferring lack of leadership in Sars have an impact on taxpayers needing to do what is required of them. We noticed taxpayers paid in August, all of a sudden in February there is a slow uptake. We took it upon ourselves to contact each taxpayer and discovered reluctance and all sorts of excuses,” Moyane said.

Moyane touched on media reports stating the “biggest problem” South Africa faced was an “erosion of the integrity of Sars”, adding such reports were “hugely problematic”.

“The loss of skills is certainly not true. Since April 1, 279 employees left the organisation through resignations, retirements etc, while we have recruited 321 new employees … Incidentally, Sars undertook 31 958 training sessions to up-skill our employees.”

But a spike in fraudulent VAT claims was seen this fiscal season, Moyane said, with Sars looking into a taxpayer with multiple outstanding returns and VAT claims.

“It is important to check each VAT claim otherwise we won’t be doing our work.

“We must indicate that we are not immune to VAT fraud taking place, which is why systems are there and tightened to avoid such.”

Asked about his relationship with Finance Minister Gigaba, following his request for “cordiality and respect” from former minister Pravin Gordhan, Moyane said: “My relationship with the previous minister is not an issue as I have a new minister. My issue is to deal with the matters at hand.”

Gigaba also responded by saying he had no “preconceived ideas” and was not given a “hand-out of who to look out for.” –