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SARS potentially misled the public about revenue collection in 2016/2017

APRIL 3, 2017
SARS potentially misled the public about revenue collection in 2016/2017

South African Revenue Service Commissioner, Tom Moyane, potentially misled South Africans when he claimed that the revenue service reached its revised target of R1.14 trillion for the 2016/17 fiscal year, the Democratic Alliance (DA) said on Monday.

"The commissioner claimed he would deal with 'the elephant in the room', but then did exactly the opposite, and did not disclose the amount owing in VAT refunds as of 31 March 2017," said Alf Lees MP - the DA's Shadow Deputy Minister of Finance.

"The commissioner simply cannot claim to have reached the revised target if there are significant amounts outstanding in VAT refunds, which we know amounted to R19.6 billion as of 28 February 2017.

"I will, therefore, write to the SARS commissioner, Tom Moyane, requesting him to disclose the total amount of VAT refunds outstanding as of 31 March 2017.

"We cannot have a situation where the SARS potentially misleads the public about its performance in terms of revenue collection into the 2016/17 fiscal year."

For the second year in a row, the South African Revenue Service (SARS) has broken the Trillion Rand mark in revenue collection.

SARS has collected in gross terms R1.367 trillion – making the preliminary outcome for the 2016/17 financial year, net of refunds of R222.4 billion, therefore R1.144 trillion. 

"As at midnight 31 March 2017 SARS had collected R1.144 trillion in line with the revised estimate as announced by the former Minister of Finance in the February 2017 Budget speech," SARS Commissioner Tom Moyane said at a media briefing on Monday.

Also present at the briefing, new Finance Minister Malusi Gigaba said South Africans should pat themselves on the back as a nation - following the announcement of revenue collection.

The Minister, who at the start of the briefing said he had received a warm reception at SARS, said his mandate was to support the revenue service in the execution of its duties.

"We take the responsibility of this economy very seriously and with the greatest degree or urgency," said the Minister.

This, as Commissioner Moyane said the revenue realisation was made even more difficult given significantly declining consumption levels constrained further by an interest hike cycle and deteriorating business confidence.

SARS said Personal Income Tax (PIT) which has for long being the anchor of revenue collections under performed by R15.2 billion. The growth of PIT declined from levels exceeding 12% to about 9% due to job shedding and wage settlements, among others.

For the tax season that closed in 2016, SARS received 5.74 million returns by the close of tax season for non-provisional taxpayers.

Over the tax season SARS branch offices assisted over 5.1 million tax payers, while the Contact Centre handled over 3.6 million calls. In addition, a total 92.4% of tax returns were assessed within a period of three seconds.

Meanwhile, the revenue service said it had become more clinical and methodical in its collection initiatives.

Refunds

Referring to it as the elephant in the room, Moyane said complaints expressed by taxpayers about outstanding refunds especially pertaining to Value Added Tax have not gone unnoticed.

"SARS would like to assure taxpayers that it is not due to a lack of concern, care or efficiency by SARS. SARS has not changed its approach to refunds,” said Moyane. 

In addition, the revenue service has put in place systems and processes to ensure minimum delays in payments of refunds.

"As at 31 January 2017 SARS paid VAT refunds of R155.4 billion versus the same period last year of R142.8 billion,” said the Commissioner.

On the other hand, the revenue service has prevented R23.8 billion in fraudulent refunds from being paid. This as SARS noted an increase of fraud when coming to refunds.

Celebrating achievements of SARS

In his remarks, Minister Gigaba said the achievements of the revenue service need to be celebrated.

“SARS collects 90% of all government revenue. The achievements they have announced are of national significance,” said the Minister, adding that the country should be proud of its high level of tax compliance.

“The numbers being reported today bear testimony to the fact that SARS remains as an asset of value to South Africa,” said the Minister.

–additional reporting SAnews.gov.za