Sars facing ‘choppy seas’
R108.3M: IRREGULAR EXPENDITURE ON CONTRACT RENEWALS, PERFORMANCE BONUSES
Acting commissioner optimistic that taxpayers won’t have to contact a call centre or visit a branch.
The South African Revenue Service’s (Sars) acting commissioner Mark Kingon displayed in-depth organisational knowledge as he briefed parliament on Sars’ 2018 annual report to March 31 2018.
“We can’t afford mess-ups at Sars. It is an important organisation and it has to do what is right in every circumstance.
“We are going in the right direction, but we are facing choppy seas.”
Non-compliance
Performance bonuses were paid without the finance minister’s approval; such irregular expenditure amounted to R4.3 million.
Sars also incurred irregular ex- penditure on two contract renewals amounting to R104 million as it hadn’t implemented Treasury’s new rules.
Tax ombud
Sars is also dealing with the ombud’s finding on refunds. Ten cases have been dealt with and a new system to end the problems experienced with stoppers on refunds is being put in place. The VAT and diesel refund accounts will be split.
Operational matters
Kingon noted that:
Sars has halted non-core litigation to focus on its core mandate.
It’s trying to shorten branch queues by focusing on improved service delivery in other areas. Kingon’s optimistic that ultimately taxpayers should be able to self-service and not have to contact a call centre or visit a branch.
While there are concerns about the IT system, this aspect was misconstrued in the press; the Sars system won’t collapse.
The current eFiling platform is reaching the end of its cycle and will be replaced with Html5 for the 2019 tax year. The IT infrastructure must be refreshed. Sars is running on Windows 7; new equipment will have to be installed to run on Windows 10.
Major highlights include:
6.3% revenue growth year on year, with 1.3% GDP growth. 94% filing compliance. 93.63% returns assessed within the first 24 hours of receipt cycle. R2.7 billion in fraudulent claims prevented. 17.2 million tax returns submitted in 2018 (2017: 16.6 million).
Illicit economy
Sars has established an illicit economy unit that’s currently dealing with 58 cases. Primary concerns are tobacco and fuel.
Financial statements
Total revenue accounts collected, comprising taxes, levies, duties, fees and other monies, amounted to R1.3 trillion (2017: R1.2 trillion).
Total revenue from rendering of services, other income, and interest received, amounted to R554.7 million (R1 191.2 million).
Total expenditure, comprised mainly of R7.5 billion employee costs (R7.2 billion), amounted to R10.9 billion (R10.8 billion).