SARS Budget Vote Presentation to the Ad-hoc Committee on Finance
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Transcript of SARS Budget Vote Presentation to the Ad-hoc Committee on Finance
SARS Budget Vote Presentation to the Ad-hoc Committee on Finance
2 June, 2004
Contents 10 Years of delivery Key Government
Challenges Revenue Overview Service Assessment Enforcement Customs Law Administration Siyakha
Risk Management People Technology Finance Corporate Relations Internal Audit Communications Road Ahead
CONGRATULATIONS ON YOUR ELECTION!
Welcome to new members Thank you for your support…
10 years of delivery..BEFORE Low Revenue Weak customs Inefficient processes Ineffective enforcement Poor compliance Poor technology Low skills
AFTER Significantly increased revenue
collections Visible and more efficient customs More efficient, streamlined and
integrated processes Visible and more efficient enforcement Increased compliance culture Enhanced and stable technology
platform Enhanced focus on development of
technical and management skills
But, much still needs to be done! Tax gap – more revenue Trade control vs facilitation balance Compliance culture Process innovation Product redesign Focused enforcement Industry analyses Better skills Integrated systems Document management
Key Government Challenges Efficient delivery of social
grants to rural beneficiaries Expanding the Public Works
programme Addressing HIV and AIDS and
other emerging diseases Matching the skills to the
requirements of the economy Meeting increasing demand
for housing and services Promote National identity and
pride Border security
Reducing the levels of crime Provide the necessary skills
the economy needs Extend and protect the fruits
of democracy to most vulnerable groups
Position SA strategically in the global environment
Enhance service delivery and capacity
Improve intergovernmental relations and integration in implementation
Achievements For The Past Six Years
R 'billion 1998/9 1999/0 2000/1 2001/2 2002/3 2003/4
Target 179.2 193.9 213.6 236.8 268.5 310.0
Collections 184.8 201.4 220.3 252.3 282.2 302.4
Above/under target 5.6 7.5 6.7 15.5 13.7 (7.6) Total additional collections (10 year period) 50.4
Sources of Revenue 2004/05
Most significant change in the contribution from taxes this year is a higher contribution from Excise & VAT and a corresponding lower contribution from STC (approximately 2%).
VAT , 89,500,000
CUST OMS, 9,500,000P E RSONS, 105,938,000
COMP ANIE S,68,800,000
FUE L LE VY ,17,409,000
OT HE R, 11,464,700ST C, 6,760,000E XCISE , 14,021,911
RFT , 6,000,000 SKILLS, 4,300,000
Gross Tax Revenue 2001/02, 2002/03 and 2003/04
Revenue Source (Rbn ) 2001/02 2002/03 Y/Y
Growth 2003/04 Y/Y Growth
PIT 90.4 94.3 4% 98.3 4%
CIT 42.4 55.7 31% 59.7 7%
VAT 61.1 70.1 15% 80.6 15%
Other 58.5 61.9 6% 63.9 3%
TOTAL 252.4 282.0 12% 302.5 7%
Fiscal overviewR million 1999/00 2000/01 2001/02 2002/03 2003/04
Total Revenue
198,162.4
215,591.9
248,262.5
278,507.8
299,390.2 Total Revenue as % of GDP 24.2% 23.6% 24.6% 24.2% 24.5%
Total Expenditure
214,749.9
233,934.0
262,904.5
291,529.1
329,013.8 Total Expenditure as % of GDP 26.2% 25.6% 26.0% 25.4% 26.9%
Main Budget Deficit
(16,587.5)
(18,342.1)
(14,642.0)
(13,021.4
)
(31,385.2
)Deficit as % of GDP -2.0% -2.0% -1.4% -1.1% -2.6%
State Debt Cost
44,289.7
46,320.9
47,580.7
46,807.7
46,312.0 Debt Service Cost as a % of GDP 5.4% 5.1% 4.7% 4.1% 3.8%
GDP
819,420
914,634 1,010,91
9 1,149,89
1 1,223,80
5
For most developing countries prioritising human development needs is overshadowed by the funding thereof. A recent UNDP report used South Africa as an example to developing countries of how to fund development by broadening the tax base.
1,7 MillionImport
transactions
1,4 MillionExport
transactions
3 000Bonded
Warehouses
3 000Rebate
Manufacturers
14 000 SARS Employees
136 000Registered
Traders/Operators
1 451Manufacturers of
excisable products & 4 licensed distributors
1,4 MillionSACU Movements
SARS Volumetrics
4 MillionIndividual taxpayers
1,3millionCorporate Taxpayers
536 281Vat vendors
274 764PAYE Employers
SERVICE
Service Created dedicated service capacity at all SARS offices Established a free e-filing service for frequent filed taxes Consultation on draft taxpayer service charter Established two major inbound call centre in KZN(110 seats
growing to 220) and WC (120 seats growing to 280) Outbound call centre in Gauteng for debt collection /
outstanding returns: (60 growing to 140 seats in mid-July 2004) Simplified tax returns for easier completion and compliance Extended taxpayer education to increase awareness of tax
obligations Created the independent Service Monitoring Office to monitor
service Introduction Dispute Resolution Process for tax disputes
(2003) and Customs (2004)
Service: New Branch OfficesKZN Durban Branch Office in Durban Durban Customs Branch Office in
Durban Pietermaritzburg Branch Office Pietermaritzburg satellite compliance
office Pinetown Branch Office Mount Edgecombe Branch Office
Western Cape Western Cape Call Centre Taxpayer Service Branch Offices were
also opened in the following locations: Bellville Revenue Branch Office Interim Cape Town Revenue Branch
Office Cape Town Customs Branch Office
Cape Town International Airport New Cape Town Revenue Branch
Office Beaufort West Revenue Branch Office George Revenue Branch Office Parliamentary Service Unit – Cape
Town Paarl Revenue and Excise Branch
Office Worcester Revenue and Excise Branch
Office
Service : Next Phase Western Cape (2004) Stellenbosch Revenue and
Excise Branch Office Cape Flats Revenue Branch
Office Cape Town International
Airport Customs Branch Office Upington Revenue and
Customs Branch Office Vredendal Revenue and
Excise Branch Office Saldanha Customs Branch
Office
Gauteng (2004) Pretoria East : revenue office
(March, 2004) Johannesburg, in Carlton
Centre. Revenue and Customs Branch Office (April 2004 June 2004)
Enforcement Centre in Megawatt Park (August 2004 onwards)
Randburg : Revenue branch office (August 2004)
Soweto : expanded Revenue office . (August 2004)
Service: KPA’s1. To create and maintain a clear SARS CRM strategy
2. To implement SARS CRM strategy
3. To ensure effective Taxpayer education
4. To create and maintain a Taxpayer charter to meet citizen's needs to ensure effective service complaints and queries process
5. To ensure effective compliance with the Dispute Resolution process
6. To simplify administrative requirements for small business
The SARS Corporates Office Located at Megawatt Park, Johannesburg single office for large SA corporates Will cater for all taxes (currently only income tax) Start with 3 industry segments; 8 segments by
end of financial year Each segment will have account / relationship
managers Dedicated service for assistance to foreign
investors A new advance rulings facility will be introduced
early 2005 (legislation
Corporates Office: KPA’s1. To finalise a compliance and service strategy for large
business organisations
2. Implement industry segments
3. Develop and implement audit strategy for corporates
4. Improvement in service to corporates
5. Revenue collection
6. Manage payment process efficiently