SARS is taking the wind out of the sails of tax dodgers

Addressing the Nation:

"SARS is taking the wind out of the sails of tax dodgers"

In his first letter to the nation for the month of

April, His Excellency, Cyril Ramaphosa focused on the country’s improved tax revenue which is supporting South Africa’s economic recovery and growth.

“Last week, the South African Revenue Service (SARS) announced in its preliminary tax revenue collection outcome that it had collected over R1.5-trillion between April 2021 and March 2022. This a 25% improvement over the previous year and a 15% increase over the last year prior to the COVID pandemic.

“Over the same period, SARS also paid out its highest amount in tax refunds since it was established 25 years ago.

“A competent tax revenue collection agency is at the heart of building a capable state.

“Tax revenue propels our nation’s development. The money collected by SARS finances service delivery and infrastructure. Through the R17.8-trillion that SARS has collected since its establishment in 1997, we have been able to build more social infrastructure like clinics, schools and hospitals, upgrade and build new roads, and support society’s most vulnerable through social grants and other measures,” – President Ramaphosa.

His Excellency recalls that restoring stability and credibility in the South African Revenue Service was among his top priorities when he was elected President in 2018. Four years ago, SARS was reflecting on the consequences of state capture and as a result this undermined not only taxpayers’ morale but also business confidence. One of our President’s first steps in this regard was to appoint a commission of inquiry into tax administration and governance, chaired by retired Justice Robert Nugent. By the end of 2018 the commission had delivered its final report. In 2022, four years later, SARS has implemented nearly all the

16 recommendations and 27 sub-recommendations and has a programme to promote tax morality and compliance.

President Ramaphosa goes on to attribute the increase in tax revenue to current high commodity prices, as well as the strategic improvements SARS has made to improve its information technology, recruitment and modernisation aimed at tax avoidance and curbing criminal activity.

He notes that two of the SARS success stories include the Illicit Economy Unit which combats illicit trades and the Large Business Unit - relaunched in 2020 - which has resulted in effectively managed tax collection from JSE-listed companies, multinationals and high net worth individuals. Personal income and PAYE have also shown an improvement in compliance.

“SARS is taking the wind out of the sails of tax dodgers, beneficiaries of the proceeds of crime, and those involved in corrupt activities.

It is well-established that ‘the taxman’ is one of the most efficient tools to combat corruption.

“In cases where an individual’s lifestyle does not match what they declare, SARS has been conducting lifestyle audits. In the last year, SARS has completed lifestyle audits that resulted in the collection of a further R474-million.

“As we forge ahead with efforts to strengthen the capacity of the state and rebuild institutions that were systematically weakened by state capture, we have much to learn from what SARS has achieved in a relatively short space of time,” – President Ramaphosa.

In this letter His Excellency unpacks the correlation between well-run, efficient state institutions and increasing levels of trust in government – this then has a knock-on effect in terms of business and investor confidence, encouraging greater investment and economic growth.

Our President then congratulates both the leadership and the staff at the South African Revenue Service on their performance –

and gives a vote of thanks to the loyal South African taxpayer – celebrating the fact that our tax base grew with 1.8 million new registrations over the past year.

“We can only rebuild South Africa if we continue to meet this shared obligation, and if we intensify the work currently underway to ensure that these taxes are used wisely and efficiently,” – President Ramaphosa. •