Strengthening the South African Revenue Service (Sars) will remain one of government’s top priorities for this year.
In his Budget speech on Wednesday, Finance Minister Tito Mboweni emphasised that building a capable State that serves South Africa, is “integrally linked to the success of Sars”.
To achieve this, Mboweni said the new Sars Commissioner was focusing on stabilising the organisation, re-establishing integrity and compliance functions and restoring employee confidence and public trust.
Revenue recovery plans include assistance from the re-established Davis Tax Committee to address tax leakages, customs fraud, trade mispricing and harmful tax practices; setting up a new centre focused on wealthy individuals who have complex tax arrangements; and renewing the focus on illicit and criminal activity, including noncompliance of religious public-benefit organisations.
Sars is also reviewing its procurement processes, while contracts that do not deliver value for money have not been renewed.
A number of senior officials implicated by the Nugent Commission have left and experienced staff returned to roles from which they had been displaced.
“Strengthening Sars will take time, but will result in improved revenue collections in the years ahead,” Mboweni said on Wednesday.
As part of the efforts in rebuilding governance at Sars, government plans to publish a discussion document by June 2020 setting out proposed legislative amendments to strengthen governance at Sars.
These will include an improved appointment and removal process for the Commissioner by the President, and an appointment and removal process for Deputy Commissioners.
The Office of the Tax Ombud has proved effective in ensuring that taxpayers are not prejudiced by Sars, the National Treasury noted.
Government also intends to strengthen the ombud and separate it financially and operationally from Sars.
In addition, government said it “recognises the need for an independent office to oversee governance and conduct within Sars”.
Accordingly, government will propose an inspector-general to monitor and report conduct and performance metrics to government and the public; safeguard whistleblowing by Sars officials in a way that keeps tax information secret; and empower senior Sars officials to disclose any lapses or findings by the internal audit function.
The inspector-general will also be expected to provide independent assurance that internal processes are “sound and unbiased”.
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