Gigaba announces inquiry into SARS under-collection of tax
FINANCE Minister Malusi Gigaba has approached President Jacob Zuma to urgently establish an inquiry into the tax administration and governance of the South African Revenue Service (SARS).
“The president has acceded to my request‚ the commissioner of the South African Revenue Service [Tom Moyane] has been informed and he is fully supportive of the process and he is willing to cooperate‚” Gigaba said at a media briefing yesterday after addressing South African Airways staff.
He said the inquiry would be established soon and details would be released in due course, including the terms of reference‚ the time frame and the judge who will preside over it.
“We expect this inquiry to be constructive [and] strengthen the institution where possible.
“It is critical for government to determine the cause of the tax revenue under-collection in order to enable government to take urgent remedial steps to ensure that SARS is able to meet its revenue targets as set out in the Medium Term Budget Policy Statement and budget.”
Treasury announced a R50-billion revenue shortfall‚ wider than economists expected, in the budget.
Gigaba said he wanted the inquiry to help to assess what factors were responsible for the under-collection of revenue by SARS‚ and what steps needed to be taken to improve performance management systems at SARS to improve its capacity to collect revenue.
He said while “the economic cycle is the most likely and significant factor driving lower revenue-collection‚ other factors could also be at play”.
He cited as examples weakening tax morality and challenges facing tax administration.
“Whatever the reason‚ the risk of under-collection of revenue impacts directly on the size of future budget deficits, hence on the sustainability of the projected debt-to-GDP trend, and on our credit rating and growth prospects.” – BusinessLIVE and TimesLIVE