The South African Revenue Service (Sars) was encouraged by the measured progress in rebuilding Sars as an institution, transforming itself into a smart, modern service, Sars commissioner Edward Kieswetter reported to Parliament this week.
In a statement on November 9, Sars said it had collected more than R1.55-trillion at gross, which comprises of a net of R1.25-trillion of the revenue estimate, which is R38-billion more than the revised estimate.
Refunds paid amounted to R300.6-billion, which is R20-billion more than in 2019/20.
“Our specific compliance interventions to detect and deter non-compliance yielded R172-billion, which shows room to improve compliance levels across all tax types,” Kieswetter noted.
This dovetails with Sars’ strategic objective of making it costly for those who are wilfully non-compliant.
Further, R38.9-billion had been granted in Covid-19 relief measures and trade to the value of R2.6-trillion had been facilitated in accordance with the Sars mandate.
Tax compliance levels were under strain, with a composite compliance level of 62.61%, compared with 65.05% in the previous year. The Public Confidence Survey points to favourable preference of tax morality, but that has not seen an appreciable rise in compliance, he said.
A focus area has been the compliance levels of the various segments, such as employers, small, medium-sized and microenterprises, large businesses and international and high wealth individuals.
In addition, compliance levels of tax products, such as pay as you earn and corporate income tax, have been a concern, and Sars has embarked on focused programmes to address this trend.
Kieswetter warned, however, that the impact and prevalence of corruption and waste was not helpful in enhancing tax morale within society.
Sars’ enforcement efforts were yielding results in a difficult and challenging terrain. These efforts recovered R147-million from personal protective equipment fraud and there was a conviction rate of 96% through collaboration with the National Prosecuting Authority. Sars is also working with all other enforcement agencies and other government agencies.
Meanwhile, the tax base was broadening, with 1.6-million taxpayers added to the Sars tax register resulting in R4.6-billion being added to the net collections for the year under review.
“Our strategic objective to make it easy and simple for taxpayers to comply has also yielded impressive results, including 86.3% of Sars interactions done through digital channels such as eFiling and the MobiApp.
“Most standard taxpayers, 83.2%, or 3.4-million taxpayers, had received auto-assessments based on third-party data available to Sars. All taxpayers needed to do was to click accept or edit. The effectiveness of these channels are also indicated by the fact that R1.55-trillion was collected via eFiling.”
Further, in the customs space, the Accredited Economic Operator (AEO) programme granted 132 participants Preferred Trader status.
“Frontline interventions for Preferred Traders dropped by 22% in this period; 5.6-million Customs declarations were processed under 10 seconds which is 95% of declarations; while inspection times were reduced from 109 hours to 44 hours. Customs seizures amounted to R2.7-billion.”
The newly launched High Wealth Individual Segment has written 1 400 direct letters to wealthy individuals and 275 have already been reviewed. Equally, Sars has also detected 26 000 unregistered taxpayers who have financial assets with economic activity in excess of R1-million.
“In order to deliver on its comprehensive programme and despite the financial constraints, Sars is investing 3% of its budgeted resources in its modernisation programme so that it can remain abreast in a fast-changing technology space,” Kieswetter added.
He expressed his heartfelt thanks to Sars staff for their inestimable support in discharging the organisation’s mandate. Kieswetter also apologised to taxpayers who may have been unable to transact with the organisation owing to system challenges.