Tax indaba leaves only questions
TAX INDABA: QUESTIONS UNANSWERED, DESPITE KINGON’S PROMISES
There is a disconnect between taxpayers’ views and how Sars sees itself.
There is a disconnect between taxpayers’ views and how Sars sees itself.
Looking back over the Tax Indaba week, I’m left feeling dissatisfied. So much was left unsaid. Despite SA Revenue Service (Sars) acting commissioner Mark Kingon seeming to offer an olive branch, saying: “Sars is committed to the fair treatment of taxpayers … to changing perceptions by doing our work as expected, with integrity and within the framework of the law without fear or favour”, fighting talk came from others.
For the first time, most of the Sars executive sat on a panel discussion at the indaba. Ignoring serious internal problems and possible conflicts of interest, the discussion centred on collecting the R1.34 trillion revenue target.
Sars faces many problems, from a lack of skills to a ballooning debt book, and still has to introduce penalties for companies not filing returns.
Chief enforcement officer Mogola Makola is threatening that “we know who you are and we will see you in jail”.
It will be good news if Makola was referring to known tax offenders whose investigations were set aside. Or is she referring to compliant taxpayers who are requested to submit documentation repeatedly?
Does she have such faith in Sars’ “risk engine” that she is willing to stand by the tax risks it is spewing out, rather than checking on the risk identifiers?
In short:
Ongoing dialogue between Sars and tax practitioners is vital. Rhetoric and defensiveness should go;
It’s time for the risk engine to undergo a major overhaul. If its risk identifiers were made public, we would no doubt gape in astonishment. It’s not amusing for low-earning employees who are forced to take leave to get to a call centre to prove why they don’t have to be tax registered;
New Sars employees should spend a couple of months in the call centre to get acquainted with the business, including executives and senior management;
How can Sars improve its service offering and relationship with taxpayers? I suggest Sars senior managers and executives spend at least one month in a year working in a branch; and
There’s a massive disconnect between how Sars perceives itself and how it’s perceived by taxpayers. There’s a gaping hole in Sars’ understanding of where it’s flailing in tax avoidance and tax evasion, and its ability to identify legal loopholes that fuel arbitrage opportunities.
Kingon acknowledges Sars’ lapses and is “committed to changing the narrative”. Aiming to build a more efficient workforce, Sars has embarked on three staff development programmes and a basic customs course.
He understands it’s necessary to rebuild the trust between Sars and taxpayers. He also stressed that Sars needs to be fair when dealing with taxpayers. He requests support. He’s right, he cannot do this on his own. But Sars should take cognisance of its flaws and clean up its house.
Unfortunately, it is easier to harass taxpayers within the system, while it takes specialist knowledge, commitment and guts to go after those who aren’t.
Can Sars step up to the mark?