SARS Clean Up On The Cards

SARS Clean Up On The Cards

Written on 03/01/2019
MJ Minter Inc


There has been a lot of banter about Tom Moyane’s time at SARS. The recent SARS commission has highlighted several issues and, in the recent budget, a number of commitments were made in this regard. We summarise these for you below

Ensuring transparency in tax administration

To raise the revenue needed to fund its social and economic policy commitments, South Africa requires its tax administration to be efficient, effective and impartial. Reports by the SARS Commission highlight maladministration and abuse of tender procedures that occurred at the entity between 2014 and 2017. The Commission’s main finding is that these failings stem from a “massive failure of governance and integrity” after the appointment of the entity’s previous commissioner in 2014. Government has started implementing the most urgent recommendations, as discussed below. A new commissioner is expected to be appointed in the near future. The Minister of Finance intends to introduce legislative amendments this year giving effect to a number of the Commission’s governance recommendations.

Implementing the SARS Commission recommendations

Government is considering a comprehensive response to the SARS Commission’s report.

In the interim, it is implementing the Commission’s most pressing recommendations, including the following:

  • The Presidency has started the recruitment process for a new SARS Commissioner, who will have to consider the Commission’s recommendations concerning management of the revenue service.
  • SARS is re-establishing a division that will focus on large businesses. This process, which includes the recruitment of specialists, is expected to be completed by April 2019.
  • In August 2018, SARS launched an Illicit Economy Unit to investigate syndicated tax evasion schemes in high-risk sectors, including the tobacco trade. This unit has also begun to investigate potential tax-related offences in relation to some of the activities highlighted by various commissions of inquiry.
  • SARS has taken steps to strengthen the management of its information technology systems, rebuild its technical prowess, and harness opportunities arising from information-sharing agreements between national tax authorities.
  • Through internal processes, SARS is implementing recommendations concerning inappropriate actions, fruitless and wasteful expenditure, unfair labour practices and maladministration.
  • SARS is reviewing contracts that breached public procurement regulations and will act to recover funds spent.

The implementation of the above is most welcome and we look forward towards a bigger pool of taxpayers all paying their fair share on taxes!