R3bn to improve tech
SARS: SHOWS COMMITMENT TO RESTORE TAX COLLECTOR TO WORLD-CLASS
Treasury will soon publish a discussion document proposing legislative amendments to Sars’ governance.
The South African Revenue Service (Sars) has been given a huge injection of R3 billion to improve its technology infrastructure and artificial intelligence capabilities.
The tax authority has been nearly decimated by years of capture under former commissioner Tom Moyane, impacting on its ability to collect taxes desperately needed to fund service delivery.
The additional spending will also be used to expand and improve the use of data analytics and participate meaningfully in global tax compliance initiatives.
“A digitalised Sars is intended to lower costs of compliance, simplify tax administration and improve collections,” National Treasury says in the 2021 Budget Review.
The Commission of Inquiry into Tax Administration and Governance by Sars, chaired by Justice Robert Nugent, made 27 recommendations to address the institutional damage and governance failures at the institution.
According to Treasury, current Sars Commissioner Edward Kieswetter has implemented 14 of these recommendations.
The commissioner said Sars required R800 million to address its technological and skills needs.
The boost of R3 billion shows a commitment by government to restore it to its former strength.
Case files handed over
Sars has also started legal processes to recover unwarranted expenditure and has handed over case files on persons identified in the Nugent Commission’s report.
The inter-agency working group on criminal and illicit economic activities has completed 117 investigations, resulting in additional revenue of R2.7 billion.
Customs and excise operations are reducing the illicit movement of goods across borders and Sars will continue its focus on consolidating wealth data for taxpayers through third-party information. This includes bank accounts and financial institutions.
“This will assist in broadening the tax base, improving tax compliance and assessing the feasibility of a wealth tax.”
Governance changes for Sars
Treasury will soon publish a discussion document proposing legislative amendments to Sars’ governance.
It outlines processes to appoint and remove a commissioner and the establishment of at least two deputy commissioner roles as well as an executive committee.
It also considers measures to improve governance and integrity in oversight processes, including the feasibility of a governance board, an inspector-general and mechanisms to account to the minister of finance.
Several changes have been made to the Tax Administration Act that increase the possibility of taxpayers being criminally charged for certain offences, like the wilful or negligent act of not alerting Sars to any changes to a taxpayer’s personal information.
This could result in a two-year jail sentence or a fine. The change has been introduced to ensure more success in the courts when taxpayers are being charged with non-compliance.