SARS Commissioner Edward Kieswetter

Building a Robust Tax Collection Agency

By Jessie Taylor

South African Revenue Service (SARS) Commissioner Edward Kieswetter will remain at the helm of the nation’s tax-collecting authority. His five-year term was set to end in April, but President Cyril Ramaphosa requested that his term be extended by two years.

The decision will allow SARS the opportunity to continue to implement its strategic intent and transformation, a plan the organisation started in 2019.

A Foundation in Finance

SARS is responsible for administering the South African tax system and customs service. SARS aims to make it easy for taxpayers and traders to comply with their obligations while monitoring and taking action against those who do not.

Commissioner Kieswetter took up the post in 2019 and was tasked with rebuilding SARS after it fell victim to state capture. Prior to his appointment at SARS, Commissioner Kieswetter served as the founding Group Executive of the SARS Large Business Centre and High Nett Worth Unit, SARS Chief Operating Officer and Deputy Commissioner. He has also held high-profile positions at Alexander Forbes Group Holdings, FirstRand Banking Group and Eskom.

He has also served in a number of international roles, including as World Customs Organisation (WCO) chairman, co-chair of the African Initiative of the OECD Global Forum on Information Exchange for Tax Transparency, and the vice-chair of both the OECD Global Forum on Information exchange for Tax Transparency and the African Tax Administration Forum. The extension of Commissioner Kieswetter's term provides time to strengthen the leadership at SARS and prepare for an orderly leadership transition in the organisation over the next two years".

SARS said that measurable progress has been made to position the body as a credible tax and customs authority that plays a pivotal role in helping the government build a capable state for all South Africans' social and economic development.mCommissioner Kieswetter said that “this effort must be intensified and sustained”.

Commissioner Kieswetter said: “I can assure all South Africans that, with your support, SARS will spare no effort and continue to work hard to ensure that the vision of a Smart, modern SARS with unquestionable integrity, admired by all is achieved. SARS remains inspired by the transformative and Higher Purpose of serving all South Africans”.

Rebuilding After State Capture

The extension of Commissioner Kieswetter's term comes amid a strong performance from SARS. The tax agency announced that it had collected a record gross amount of R2.16 trillion by the end of March. It paid out refunds of R414 billion to taxpayers, which is the highest ever in refunds compared with the R381 billion paid out in the prior year and representing growth of 8.6%.

This brings the collected net amount to R1.74 trillion, which is almost R10 billion higher than the revised estimate and R54 billion more than last year’s R1.69 trillion. The total refunds this year represent about 6% of GDP, and R120 billion of the refunds were directed to small, medium-sized and micro-enterprises. R37 billion of the refunds benefitted individuals.

SARS made value-added tax (VAT) refunds of R343 billion, representing growth of 7.5% over the prior year, said Commissioner Kieswetter. Compared with the 2022/23 fiscal year, total tax revenue increased by R54.2-billion, or 3.2%, driven by personal income taxes of R49.5billion, up 8.2% year-on-year, on the back of higher than estimated compensation of employees, as well as higher domestic VAT of R39.3billion, up 8.1% year-on-year.

The organisation is realising its Vision 2020-2025 of a smart, modern tax agency that can be trusted and admired by all, Kieswetter said. This is evidence of the success of the SARS Compliance Programme. The programme uses data, artificial intelligence and machine learning algorithms to successfully counter criminality and wilful noncompliance.

These systems also ensure that no legitimate refunds are denied while preventing impermissible and fraudulent refunds. The compliance programme contributed a preliminary R293.7billion by the end of March. This is an increase of R61.9-billion, or 26.7%, from the previous year’s R231.8-billion. In addition, R91.3billion in debt was collected from 2.6 million cases. Voluntary disclosures contributed R3.5billion, made up of 1 435 concluded applications.

Meanwhile, also under the compliance programme, the investigations of syndicate crimes contributed R20.1-billion and executed 147 preliminary investigations made up of preservation orders and collapsing one tobacco and gold illicit financial flow scheme.

“More than five years ago, State capture left SARS an organisation in distress and severely compromised. We embarked on a journey to reimagine the organisation. SARS is succeeding in its strategic intent of building a tax and customs system that is based on voluntary compliance and sharpening its capability aimed at the detection and deterrence of wilful noncompliance.

“The rebuilding of SARS entailed broadening the tax base, instilling and improving a culture of voluntary compliance and fiscal citizenship, and creating a seamless intersection of people, data and technology to optimally deliver on our mandate, as well as working with all stakeholders in the tax ecosystem and fostering trust and confidence on SARS,” Commissioner Kieswetter said.

Sources: SARS | The Presidency | Engineering News | EWN