CLUSTER: HOSPITAL SERVICES Presentation to Portfolio Committee on Health 3 April 2001
Portfolio Committee 2001 Presentation to the Portfolio Committee on Finance Date: 11 May 2001...
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Transcript of Portfolio Committee 2001 Presentation to the Portfolio Committee on Finance Date: 11 May 2001...
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2001
Presentation to the Portfolio Committee on
Finance
Date: 11 May 2001Presented by: Pravin Gordhan
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2001 Contents
SARS Plans 2000/01 Tax Revenue Transformation
SARS Achievements 2000/01 Tax / Trade policy implementation Operational targets Transformation Support Services
SARS Budget SARS Focus for 2001/02
Strategic Plan Operational Objectives / KPI’s Measurement Implementation of Transformation
Divisional Plans
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2001
SARS Plans for 2000/01
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2001 Plans for 2000/01
Implementation of Tax proposals Residence Base Taxation CGT Airport Tax Other
Revenue & Customs Targets R215b vs R219.6b
Transformation Design of Siyakha / Business Architecture
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SARS Achievements for 2000/01
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2001 What has been achieved: IMPLEMENTING TAX
POLICY ?
Implemented radical tax policy changes
Taxation Laws Amendment Act 2000
Foreign Dividends
Revised regime for Public Benefit Organisations
Air passenger Tax on International Travel
Closing of tax loopholes
Restraint of trade payments
Employment companies and trusts
Revenue Laws Amendment Act 2000
Residence Basis Taxation
Enabling legislation for AGOA
Proposed draft Capital Gains Tax Bill
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2001 What has been achieved: REVENUE TARGET?
0
25,000,000
50,000,000
75,000,000
100,000,000
125,000,000
150,000,000
175,000,000
200,000,000
225,000,000
1995/96 1996/97 1997/98 1998/99 1999/00 2000/01
Printed estimate Revised estimate Actual collections
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3,000,000
3,700,000
4,400,000
5,100,000
5,800,000
6,500,000
7,200,000
7,900,000
1995/96 1996/97 1997/98 1998/99 1999/00 2000/01
Printed estimate Actual collections
What has been achieved: CUSTOM DUTY?
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2001 What has been achieved: REVENUE?
TAX REVENUE COLLECTED AGAINST GDP
0
200,000
400,000
600,000
800,000
1,000,000
95/96 96/97 97/98 98/99 99/00 00/01
Collected
GDP
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2001 What has been achieved: COMPLIANCE?
Audits Policy
Finalise new policy and approach Integrated risk based audits in teams 25% of audits are risk- based
Planning Set targets Measure achievements and cost Cost benefit Analysis
Assessments R6,370,160,874 increased form R5 for 99/2000 PAYE questions: Collected R34m from one taxpayer. Transfer pricing – investigating transactions to value of R1
billion.
Training
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2001 What has been achieved: COMPLIANCE?
Industry Investigations Food Wholesaler (JSE)
Vat Fraud – Negotiated settlement of R128m
Electronics Industry Customs and VAT invasion: New co-operative approach to
industry. 9 arrests R50m recovered
Motor vehicle imports Customs evasion Assessment R15.6 m Seizure by asset forfeiture – R60m SARS official sentence 6 years
Financial Industry Investigating undeclared income – R100m
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2001 What has been achieved: COMPLIANCE?
Criminal Investigations 107 cases. 27 Convictions 121 years imprisonment
Internal Corruption Dismissals 57 Conviction 5 Approach
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2001 What has been achieved: CUSTOMS?
Bills of entries processing Inspections
Stoppages Post clearance
Detection of illegal imports Implementation trade agreements
EU SADC AGOA agreements
Drug seizures Total value of R1,241 billion
Teaming piloted
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Established three dedicated Rapid process areas to reduce backlogs in processing of income tax returns
Reduced assessment backlogs from 850 584 to 230 000 by end of financial year - now Zero backlog
What has been achieved: OPERATIONS?
Unprocessed returns in top 10 offices @ 15/09/2000Normal inflow of returns up to 30/03/2001
850 5841 485 401
Returns processed 2 345 9852 115 985
Balance unprocessed on 30/03/2001 230 000
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2001
Improve control on outstanding debt
Implement the Bulk data capturing processes which improved quality of returns captured on the NITS system.
Initial operational problems with NITS overcome Service desks established in larger customs &
revenue offices
What has been achieved: OPERATIONS?
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2001 What has been achieved: OPERATIONS?
RETURNS UNASSESSEDINDIVIDUALS
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
1997
1998
1999
2000
2001
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Sought and obtained ministerial and cabinet approval Redesigned critical business processes for both revenue and
customs Established project teams which developed detailed
implementation plans Aligned the organisational structures with redesigned
business processes Developed a taxpayer service strategy Started the development of key performance indicators for
each business processes
What has been achieved: TRANSFORMATION?
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Accounting policy GAAP vs GRAP
Own Accounts Strong expenditure and cash resources control Accounting polices and procedures - December 2000 Fixed assets register implemented - Feb 2001. Bank account and supplier reconciliations now prepared monthly for the first time in 3 years
Administered Revenue Reconciliation of net cash received per accounting records and the individual Taxpayer
records in the core systems. Own Accounts/Administered Revenue
PFMA implementation plan developed for progressive implementation by April 2003 1st Phase of an integrated financial management system (Accounting module) implemented 2
April 2001
What has been achieved: FINANCE?
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2001 What has been achieved: TS?
New Income Tax System Stabilised
Bulk Data Capture An improved Bulk Data Capture system.
Implementation of Tax Proposals Air Passenger Tax for International Departures A Diesel Rebate system CGT
Manifest system for Customs The new manifest system for Customs
Integrated Financial Management System and Data Warehouse. Implementation is underway.
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2001
HRMS system implemented
8 500 employees positioned on Career ladders
Agreement reached with trade unions on restructuring.
New job grades verified for all employees.
Partnership formed with ACCA and university tax departments to build auditor capacity.
Performance management system developed.
What has been achieved: HR?
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Employee representivity improved.
What has been achieved: HR?
0%
10%
20%
30%
40%
50%
March '98 March '99 March '00 March '01
PERCENTAGE OF BLACK EMPLOYEES AT VARIOUS ORGANISATIONAL LEVELS
General staff
Supervisory staff
Management staff
All staff
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2001 What has been achieved: INTERNAL AUDIT?
One year and 3 year audit plan. Introduced a risk based audit approach, new audit
manual and methodology, and identified training requirements for audit staff.
Conducted focussed audits including requests that added value e.g. Review of high risk areas within Siyakha, and input into the draft prevention plan.
Identified high level risks that SARS is exposed to. Combined audit efforts between SARS internal
audit and the AG on all audits to be performed by the AG.
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2001 Budget Allocations 2001/02
Operational Budget
Personnel Exp
Admin Exp
Inventories
Accommodation
Prof & Spec Serv
Misc Exp
Capital
Total
MTEF Allocation
% of Revenue
Revenue Collected 219 732 000 000
2000/01
1.15%
2 529 114 000
2 529 114 000
132 801 661
3 003 231
180 703 830
294 611 101
68 818 247
316 441 420
1 532 734 510
234 000 000 000
2001/02
1.14%
2 673 181 000
2 673 181 000
69 807 477
7 10 8 000
220 229 107
143 836 989
100 777 979
499 900 871
1 631 520 577
2002/03
0.00%
2 944 296 000
2 874 044 373
132 894 881
7 108 000
209 416 963
166 262 740
92 248 549
564 749 287
1 701 363 953
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2001 Budget Allocation: SARS TOTAL
Classification2000/01Budget
2001/02Budget
Increase /(Decrease)
Communication 6,743,844 20,755,428 208
Finance 463,243,893 381,112,371 -18
Internal Audit 9,188,898 15,972,244 74
Human Resources 127,158,657 158,743,232 25
Operations 1,242,310,559 1,246,483,611 0
Technology Services 248,347,153 246,836,017 -1
Business Systems DesignCenter
0 50,260,331 100
Law Administration 45,045,029 54,862,620 22
Office of the Commissioner 27,417,193 23,935,113 -13
Compliance 61,768,710 111,677,239 81
Customs 155,999,064 262,542,794 68
Siyakha 0 100,000,000 100
Total 2,387,223,000 2,673,181,000 12
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Strategic Plan
Objectives & KPI’s
Implementation of Transformation
Tax / policy proposals
Measurement
Focus for 2001/02
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2001
Strategic Plan
Focus for 2001/02: STRATEGIC PLAN
Strategicdirection
Business Plan
Divisional Objective
Outputs & KPI’s
Office Objectives
Office Outputs & KPI’s
Individual Outputs & KPI’sBranch Level
Organisational Level
Divisional Level
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2001
Our Strategic goals
Focus for 2001/02: STRATEGIC PLAN
Optimising Revenue Yield
Transforming our people and culture.
Consistently providing service and education to our stakeholders
Responsible enforcement
Promoting regional and international co-operation
Promoting good governance
Ensuring consistency, uniformity and accuracy in the application of laws
Transforming our processes and technologies
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2001 Focus for 2001/02
PERFORMANCE MEASUREMENT
DIMENSIONS
Taxpayer Satisfaction
Employee Satisfaction
External Stakeholder Satisfaction
Revenue Collection
Financial ManagementOrganisational
Change & Transformation
Ministerial Initiatives
Risk Management & Enforcement
Objectives & KPI’s
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2001
Draft PBO Activities list
Tax incentives
Strategic Investment allowance
Small manufacturing companies
Diesel fuel refund - Farmers, Mining, Forestry
Review tax on banks
Unemployment Insurance contributions
Siyakha amendments
Focus for 2001/02: IMPLEMENTING TAX POLICY
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2001 Focus for 2001/02: IMPLEMENTING TAX POLICY
Classification 2000/01MTEF
Baseline
2001/02MTEF
Baseline
Increase /(Decrease)
%
Personnel Expenditure 30,189,327 33,589,888 11
- Base Amount 29,989,327 33,339,892 2
- New Salary improvements 0 0 0
- Carry through cost 0 0 0
- Consultation fees 200,000 249,996 24
AdministrativeExpenditure
2,476,264 3,545,917 43
Inventories 1,417,280 1,463,691 3
Accommodation 4,000 465,929 11,548
Prof and Spec Serv. 10,844,158 15,087,395 39
MiscellaneousExpenditure
0 0 0
Capital 114,000 709,800 523
Total 45,045,029 54,862,620 22
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2001 Focus for 2001/02: Transformation
Gauteng East Processing Center Compliance Office Taxpayer Service Centers
Gauteng West Processing Center Compliance Office Taxpayer Service Centers
Durban Processing Center Compliance Office Taxpayer Service Centers
Cape Town Processing Center Compliance Office Taxpayer Service Centers
Port Elizabeth Processing Center Compliance Office Taxpayer Service Centers
Bloemfontein Processing Center Compliance Office Taxpayer Service Centers
Tendering Process 3 Months
9/01 12/01 3/02 6/02 9/02 12/02 3/03 6/036/010
Nov 2002
May 2002
National Roll Out
Sep 2002
Mar 2003
Oct 2001
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2001
FMO functions
Processing Centre Compliance CentreTaxpayer Service
Centre Assessments
Return control
Check return
BDC
Pre-assessment
Refund checking
Payments Remittance
BDC Input
File Control New Registrations
Registration Maintenance
File Management
Mail room
Assessment Maintenance
Account Maintenance
Audit Desk Audit
Field Audit
Collections Field Collectors
Account Maintenance (Collections focus only)
Admin support (tracing)
Attorneys
Criminal Investigations
Client Service Simple queries
Complex queries
Cash Hall
Call Centre (location to be finalised)
Focus for 2001/02: Transformation
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2001 Focus for 2001/02: Transformation
Classification2000/01MTEF
Baseline
2001/02MTEF
Baseline
2002/03MTEF
Baseline
Personnel Expenditure 0 43,531,901 100
- Base Amount 0 19,394,131 100
- New Salary improvements 0 0 0
- Carry through cost 0 0 0
- Consultation fees 0 24,137,770 100
AdministrativeExpenditure
0 20,225,224 100
Inventories 0 8,878,612 100
Accommodation 0 13,428,399 100
Prof and Spec Serv. 0 10,812,144 0
MiscellaneousExpenditure
0 0 0
Capital 0 3,123,720 100
Total 0 100,000,000 100
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2001 Focus for 2001/02: CUSTOMS
Raise examination to 5% Accreditation of low risk custom traders Implement electronic submission of declarations
to cover 60 - 80 % of top clients Conduct 8 customs Mobile Unit office inspections
in high risk parts Align procedures with revised Kyoto Covention Raise capacity through
350 additional staff Improved training & management development
programs Basic operational facilities
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2001 Focus for 2001/02: CUSTOMS
Roll-out teaming Complete risk-based implementation Passenger
Control system Conclude mutual assistance Agreements with:
Transnet; Post Office Ltd. Customs Administrations of neighboring trading partners
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2001 Focus for 2001/02: CUSTOMS
Classification2000/01MTEF
Baseline
2001/02MTEF
Baseline
Increase/(Decrease)
%Personnel Expenditure 129,901,087 197,770,175 52
- Base Amount 129,901,087 197,768,175 52
- New Salary improvements 0 0 0
- Carry through cost 0 0 0
- Consultation fees 0 2,000 100
AdministrativeExpenditure
9,538,247 20,321,737 113
Inventories 3,436,200 9,120,188 165
Accommodation 5,366,409 15,951,318 197
Prof and Spec Serv. 4,257,692 6,095,936 43
MiscellaneousExpenditure
0 0
Capital 3,499,429 13,283,440 280
Total 155,999,064 262,542,794 68
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2001 Focus for 2001/02: REVENUE
Account clean-up to ensure correct accounts to taxpayers
Introduce quality control over measures to ensure correct assessments
Develop simplified Income Tax Returns Dedicated Taxpayer Service areas at all Branches Analyse developments in the economy to find
opportunity for additional revenue collection
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2001 Focus for 2001/02: REVENUE
Classification2000/01MTEF
Baseline
2001/02MTEF
Baseline
Increase/(Decrease)
%Personnel Expenditure 910,276,149 926,148,354 2
- Base Amount 908,200,864 920,954,084 1
- New Salary improvements 0 0 0
- Carry through cost 0 0 0
- Consultation fees 2,075,285 5,194,270 150
AdministrativeExpenditure
112,890,781 148,888,764 32
Inventories 56,854,733 60,500,307 6
Accommodation 80,135,938 78,622,882 -2
Prof and Spec Serv. 28,906,930 20,876,422 -28
MiscellaneousExpenditure
46,246 0 -100
Capital 53,199,782 11,446,882 -78
Total 1,242,310,559 1,246,483,611 0
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2001 Focus for 2001/02: COMPLIANCE
Audit Policy
Manual Risk Profiling implemented Automated risk profiling system
Planning Audit plans for 2001/2002 developed
Assessments Target 8 billion
Siyakha Roll-out of pilot
Training Various courses developed
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2001 Focus for 2001/02: COMPLIANCE
Industry Investigations Industry areas identified
Criminal Investigations Increased number of cases Revenue target set
Debt Collections New Target set Expand outbound Call centre New legal capacity
Tax Base broadening New approach developed
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2001 Focus for 2001/02: COMPLIANCE
Classification2000/01MTEF
Baseline
2001/02MTEF
Baseline
Increase/(Decrease)
%Personnel Expenditure 48,443,133 74,623,913 54
- Base Amount 48,443,133 74,387,909 54
- New Salary improvements 0 0 0
- Carry through cost 0
- Consultation fees 0 236,004 100
AdministrativeExpenditure
3,196,351 14,413,399 351
Inventories 849,340 2,010,132 137
Accommodation 2,091,283 3,706,414 77
Prof and Spec Serv. 246,190 7,705,803 3,030
MiscellaneousExpenditure
2,951,985 5,000,000 69
Capital 3,990,428 4,217,578 6
Total 61,768,710 111,677,239 81
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2001 Focus for 2001/02: FINANCE
Own Accounts Strengthening & enforcing proper financial record keeping &
maintaining & enforcing strong expenditure.
Administered Revenue Finalising GRAP reporting (cash accounting) at Feb 2001 with a
migration plan for progressive implementation to GAAP
Own Accounts/Administered Revenue Provide (develop/enhance) appropriate financial management
information to facilitate decision-making. Execution of PFMA implementation plan. Strengthening liaison and working relationship with AG Improving financial literacy in SARS
Procurement Providing a procurement service that is sound, cost efficient and
timeous. Ensuring that the changing business facilities needs are timeously
and economically catered for.
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2001 Focus for 2001/02: FINANCE
Classification2000/01MTEF
Baseline
2001/02MTEF
Baseline
Increase/(Decrease)
%Personnel Expenditure 25,836,710 25,169,463 -3
- Base Amount 21,555,310 22,370,769 4
- New Salary improvements 0 0 0
- Carry through cost 0 0 0
- Consultation fees 4,281,400 2,798,694 -35
AdministrativeExpenditure
177,279,067 258,248,550 46
Inventories 2,270,368 1,256,445 -45
Accommodation 206,427,774 20,240,020 -90
Prof and Spec Serv. 50,318,875 73,540,072 46
MiscellaneousExpenditure
0 2,108,000 100
Capital 1,111,099 549,821 -51
Total 463,243,893 381,112,371 -18
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2001 Focus for 2001/02: HR
Facilitate Siyakha staff redeployments Produce policy and procedure manual Launch SARS College Rationalise employee health insurance Implement employee assistance programme Develop succession plan
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2001 Focus for 2001/02: HR
Classification2000/01MTEF
Baseline
2001/02MTEF
Baseline
Increase/(Decrease)
%Personnel Expenditure 117,548,056 127,415,302 8
- Base Amount 115,518,992 123,167,301 7
- New Salary improvements 0 0 0
- Carry through cost 0 0 0
- Consultation fees 2,029,064 4,248,001 109
AdministrativeExpenditure
2,572,853 7,507,622 192
Inventories 1,027,200 10,073,840 881
Accommodation 41,000 10,708,400 26,018
Prof and Spec Serv. 89,000 189,200 113
MiscellaneousExpenditure
0 0 0
Capital 5,880,548 2,848,868 -52
Total 127,158,657 158,743,232 25
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2001 Focus for 2001/02: TS
Technology architecture A technology architecture needs to be finalised with a
proper migration plan
Implementation of Capital Gain Tax Future developments on NITS
Further development of NITS functionality: external interfaces year end functionality
Single Registration Number Infrastructure networks
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2001 Focus for 2001/02: TS
Classification2000/01MTEF
Baseline
2001/02MTEF
Baseline
Increase/(Decrease)
%Personnel Expenditure 101,135,939 125,975,180 25
- Base Amount 4,641,988 4,904,284 6
- New Salary improvements 0 0 0
- Carry through cost 0 0 0
- Consultation fees 96,493,951 121,070,896 25
AdministrativeExpenditure
2,178,398 2,196,428 1
Inventories 1,581,910 2,126,332 34
Accommodation 91,317 -100
Prof and Spec Serv. 85,708,416 85,500,583 0
MiscellaneousExpenditure
0
Capital 57,651,173 31,037,494 -46
Total 248,347,153 246,836,017 -1
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2001 Focus for 2001/02: COMMUNICATION
Tax payer education campaign Tax literacy campaign Product placement of material on popular soap operas Campaign on Income Tax Returns, Provisional Tax Capital Gains Tax Implementation Campaign
Tax Stakeholder’s workshop Materials development – publications, leaflets, pamphlets and
brochures Training and development of staff Internal communications
Re-launch Internal News letter Review website, Intranet – Corporate Image
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2001 Focus for 2001/02: COMMUNICATION
Classification2000/01MTEF
Baseline
2001/02MTEF
Baseline
Increase/(Decrease)
%
Personnel Expenditure 3,476,495 2,980,981 -14
- Base Amount 3,126,495 2,884,643 -8
- New Salary improvements 0 0 0
- Carry through cost 0 0 0
- Consultation fees 350,000 96,338 -72
AdministrativeExpenditure
2,156,351 15,114,119 601
Inventories 860,000 2,244,992 161
Accommodation 90,000 236,000 162
Prof and Spec Serv. 25,999 37,992 46
MiscellaneousExpenditure
0 0 0
Capital 134,999 141,344 5
Total 6,743,844 20,755,428 208
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2001 Focus for 2001/02: INTERNAL AUDIT
Overall Risk Management Strategy – process and the tool to be purchased.
Continuously review the corporate governance. Ensure compliance with PFMA for all its
processes and systems. Close internal control gaps using combined audit
teams to identify risks and controls. Perform audits as in the 1 year plan – Risk Audit
and Control Adequacy Review.
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2001 Focus for 2001/02: INTERNAL AUDIT
Classification2000/01MTEF
Baseline
2001/02MTEF
Baseline
Increase/(Decrease)
%Personnel Expenditure 7,392,899 12,635,508 71
- Base Amount 6,942,899 12,135,508 75
- New Salary improvements 0 0 0
- Carry through cost 0 0 0
- Consultation fees 450,000 500,000 11
Administrative Expenditure 739,099 3,014,145 308
Inventories 122,300 94,020 -23
Accommodation 5,500 68,000 1,136
Prof and Spec Serv. 61,000 49,500 -19
Miscellaneous Expenditure 0 0 0
Capital 868,100 111,071 -87
Total 9,188,898 15,972,244 74
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2001
THANK YOU FOR YOUR SUPPORT