SARS is back ... and it's got its eye on you
Acting SARS commissioner Mark Kingon says he wants to see the revenue service increase its collection by 20%
Acting SARS commissioner Mark Kingon says he wants to see the revenue service increase its collection by 20% – and key to doing that is “effective service” and enforcing “perceptions that there is a real risk” to non-compliance.
“My mandate is very clear: try and deliver to government as best as possible the revenue that it needs. I want to see a 1,5% growth rate, we’ve had a contraction like Russia has, but a 20% growth in revenue. That’s what I want to see. Because there is scope to do it. We know the tax gap is out there,” he told Times Select.
“I need to be driving compliance with service … but I also need to be driving compliance with people’s perception that there’s a risk to not comply. We are not there at the moment.”
Kingon said South Africa was “lagging behind” in tax collection, when compared to its BRICS counterparts.
“Russia is getting a 17% increase in revenue. We are lagging behind. India has a growth rate of 7,5% but they’re seeing a tax growth rate of over 17%. Russia’s growth was 1,5% but they’re seeing a tax growth rate of 20% because they’re serving their clients better and they’re bringing in a new VAT system, which I would love to bring in. But that’s obviously a tax policy thing.”Speaking after a press conference that outlined the outcomes of meetings between BRICS tax authorities and experts in Sandton this week, Kingon again acknowledged that public perception that SARS was a “captured” or legally compromised institution had had a damaging impact on tax compliance.
And he admits that this perception has been driven by an absence of effective SARS legal action against tax cheats over the past few years.
“We all know that there’s tax fraud happening, so where are the cases? That’s my biggest worry, and that’s my question to the people.
“We aren’t seeing big cases in court. The cases that you are seeing may have been investigated a few years ago. Where are the new cases?
“In fact, I walked around our Megawatt Park offices this past week and I went into the criminal investigation unit … just to find out where they are. And I said: Where are we? Where are these cases? And they showed me. There is work happening, we’ve got to get it completed and get it into the justice system.”
He later adds: “One thing I want to make very clear: we are going to treat taxpayers without fear or favour. I’m not going to protect or target, because you know you can do it both ways: I can target certain people or I can ignore certain people. We must look at the facts and apply the law.”
Kingon also believes that reconfiguring SARS processes in dealing with large business may be a key driver in increasing tax revenue. He says the revenue service is currently “running a project” that he hopes will significantly improve the service offered to big business.
“We’ve made significant progress. I’m hoping to make formal announcements in the next few months, but you’ve got to do things by the book. There are HR implications.
“I don’t want to make mistakes by not consulting with the staff first.”Last year saw growing uncertainty over whether collection of customs duties at South Africa’s borders would remain in the hands of SARS or be moved to Home Affairs.
Kingon won’t be drawn on SARS's position on the issue, but has told Times Select that he’s “not having sleepless nights”.
“People need to realise how integrated Customs is into the broader SARS environment. I was looking the other day and we collect – just via OR Tambo International Airport – R33-billion in customs duties and import VAT. You’ve got to have that integrated into the broader SARS equation.”
While Kingon is adamant that he feels politically supported in his efforts to turn around what he describes as a “downcast” SARS, he declines to answer questions about the level of support he has received from the SARS exco –cwhich, until March, worked closely with suspended SARS Commissioner Tom Moyane.
“Can I reserve my comments on that at the moment? I’m an outsider to the exco, I understand that. But we’re working together. I think we’re getting there.
“My process is to pull people along in terms of doing what’s right for the country.”