ActionSA rejects the proposed budget cuts to the South African Revenue Service (SARS), as we believe they will adversely impact its ability to effectively collect revenue and perform its mandate, potentially affecting the overall fiscal balance sheet.

As outlined in the proposed budget, SARS faces substantial cuts, with a nominal reduction of R769 million and a real cut of R1.3 billion, which we contend are unworkable and thus, demand reversal.

Owing to the critical role that SARS plays in collecting over 90% of the government's revenue, ActionSA believes it is ill-advised to further limit the capacity of the revenue collector. Crucially, if SARS cannot operate at full capacity, it will lead to constraints on the fiscal coffers.

In effect, by cutting SARS's budget, the government is biting the hand that feeds it, which defies all logic. Rather than cutting SARS's budget, SARS should be further capacitated to increase revenue collections by targeting the political elite and other criminal syndicates that, through illegal activities, remain outside the tax net.

ActionSA believes that it is nonsensical that while essential state functions like SARS and even the judiciary suffer under broad austerity measures, the billion-rand perks of a bloated cabinet remain seemingly untouched.

ActionSA calls on the government to reverse course on this matter and ensure that critical institutions are sufficiently funded to give full effect to their mandates.

 

Issued by ActionSA Member of Parliament Alan Beesley