- SARS collected R38 billion more than expected in the most recent financial year.
- The revenue service, under the leadership of Ed Kieswetter, is emphasising a culture of voluntary compliance among taxpayers.
- SARS is relying several other factors, such as incorporating recommendations from the Davis Tax Committee to improve revenue collections.
The South African Revenue Service (SARS) is relying on creating a culture of voluntary compliance among taxpayers to improve revenue collections, an official has said.
Mamiky Leolo, senior official at SARS, on Monday, shared an update on efforts to improve the capacity at the revenue service. She was a participant in a webinar discussion on policy responses to Covid-19, based on research by the Southern Africa - Towards Inclusive Economic Development (SA-TIED). SA-TIED is a collaborative research, policymaking and capacity building partnership between National Treasury, SARS and the UN University World Institute for Development Economics Research, among others.
Most recently, SARS commissioner Ed Kieswetter announced that the revenue service has collected a R38 billion more than expected for the last financial year.
Leolo said that the commissioner's five-year turnaround plan for the revenue service, encourages voluntary compliance "as much as possible".
Judge Dennis Davis has previously said the country's tax system had suffered degradation under the leadership of former commissioner Tom Moyane, this has been documented in the final report of the Nugent Commission of Inquiry into SARS. Davis also heads the Davis Tax Committee that assesses the tax policy framework against its objectives such as supporting inclusive growth, among others.
Leolo explained that to improve tax collections in the next three years, SARS plans to incorporate recommendations made by the Davis Tax Committee on possible policy and administrative improvements.
Some of the business units at SARS which clamped down on noncompliance in certain areas are also being "reinitiated and amplified", she said.
Some of these include the Large Business Centre, which had been shut down under Moyane's helm. The unit deals with tax collections from large corporate companies. Another unit which focuses on criminal and illicit economic activities is getting a second wind.
Leolo also noted SARS's massive recruitment drive to make up for the mass exodus of skills in prior years. "We are recruiting and rehiring resources to bring in revenue, with the capability required." SARS recently advertised 370 jobs, after having being allocated an additional R3 billion from Treasury to improve its capacity.
In terms of tax-avoidance practices, SARS is looking into "refund leakage protection" she said. This programme makes use of data, machine learning and artificial intelligence to detect taxpayers who were fraudulently claiming refunds. SARS managed to claw back R57 billion.
SARS also relied on data analysis to assess tax compliance of personal protective equipment tenders that were awarded.
Leolo noted that there was a general improvement in compliance by taxpayers - some had even filed on time to access disaster-relief measures offered amid the Covid-19 lockdowns last year.