2014/15-2018/19 strategic plan & 2014/15 annual ... · presentation to the standing committee...
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Presentation to the Standing Committee on Finance
01 July 2014
2014/15-2018/19 STRATEGIC PLAN & 2014/15 ANNUAL PERFORMANCE PLAN
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Agenda
• SARS Mandate
• Highlights of SARS business
• SARS Strategy
• Strategic outcomes
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SARS mandate
• Collect all revenue
• Ensure compliance with tax and customs law
• Customs service – revenue, manage borders and trade
• Advise Minister of Finance
• Advise Minister of Trade and Industry
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Core outcomes of SARS strategy
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Compliance is at the core of SARS strategy
• The Compliance Strategy seeks to:
– encourage voluntary compliance
– establish an uncomplicated system that deals fairly with those in it and minimises leakages
– increase its focus on bringing those outside the system into it
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Compliance levers
• Education
– Taxpayers that are aware of their rights and obligations are more likely to comply
• Service
– Providing a professional, fair and efficient service promotes compliance
• Enforcement
– Credible enforcement promotes fairness and deters non-compliance with tax laws
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Levers in action
• Differentiate among sectors of the taxpayers
• Breadth, depth and leverage
• Collaboration with other government institutions
• Ensure integrity of SARS systems and people
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Revenue
Segment Mgt.
Channel Mgt.
Enforcement Service
Tax & Customs Compliance
Education
People Capability
Strategy map for SARS core strategy
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Compliance challenges in the medium term
• Trends have shown improving compliance levels
• Slower economic growth will place pressure on the projected revenue collection
• Global trends of tax base erosion and profit shifting through aggressive avoidance and evasion schemes
• Growing illicit economy – e.g. cigarette smuggling
• Growing disquiet about government spending
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Therefore
• Maintain and improve public trust in SARS
• Maintain and improve compliance levels
• Respond to non-compliance early
• Increase capability to interdict illicit trade
• Combat unacceptable avoidance
• Enhance collaboration with other government institutions
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SARS business at a glance
1. Education 2. Service 3. Enforcement
Education Registration
Licensing Deregistration
Filing Declaration
Payment
Dispute Management
Receivable Management
Audit & Investigations
Judicial Process
Co
re p
roce
ss
Legislation & mandate
Education & Outreach 2013/14
Education
campaigns 4
Campaigns
to
Employers 2 096
Employees 2 144
Campaigns
through
Co-locations 1 441
MTU's 647
Points of
service 5 720
Interventions
at
Schools 234
Branches 574
Visited Institution/
organisation 3 516
Footprint:
• Branches 51
• Mobile Tax Unit 9
• Ports of entry 34
Capability to handle 4 channels (electronic, telephonic, postal and walk-ins)
Pieces of legislation - 22
Total Register – 25 mil (20.3 mil active)
• Individuals (active): 17 mil
• Companies (active): 3 mil
• Trusts (active): 0.3 mil
Number of filing transactions – 25 mil
Queries addressed – 10 mil
Tax entities audited (compliance audits) – 1.8 mil
Revenue collected – approximately R900 bn.
Number of visitors to branch offices – 6.38 mil (2012/13)
Operating expenses – 0.97% of revenue collected
Headcount – 14 137 (2013/14)
MTU served approx 720,000 people
In-depth audits 19568
Investigations concluded 333
Court cases supported 267
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2014/15 2015/16 2016/17
Revenue 993 650 1 095 100 1 208 720
Nominal growth % 10.4% 10.2% 10.4%
Source: 2014 Budget
SARS Budget 9,440 9,899 10,509
Increases Y-o-Y -1% 5% 6%
Expected Inflation (MTEF) 5.6% 5.5% 5%
Over the medium term, SARS must collect…
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Over the medium term, funds SARS will receive…
8238 757
8832 010
9457 969
10133 459 9534 393 9440 321
9898 708
10508 911
-
2000 000
4000 000
6000 000
8000 000
10000 000
12000 000
2013-14 2014-15 2015-16 2016-17
Ran
d V
alu
e R
'000
Year
Projected Cost ENE Allocation
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Revenue composition 2013/14
Marginal tax rate
1994/95 1995/96 2010/11 2011/12 2012/13
PIT % 43% 45% 40% 40% 40%
CIT % 40% 35% 28% 28% 28%
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310.9 , 35%
179.5 , 20%
237.8 , 26%
44.1 , 5%
127.6 , 14%
Personal Income Tax
Companies Income Tax
Value Added Tax
Customs duties
Other taxes
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Revenue growth 1994-2014
15
97.4
186.0
404.6
662.8 723.8
16.4
34.3
90.9
151.1
176.0
113.8
220.3
495.5
813.8
899.8
-
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
1 000.0
1994/95… ...2000/01… ...2006/07 2012/13 2013/14
Tax Customs
11.5%
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Priorities…
• Enhance technical capability of staff
• Single registration of taxpayers across government
• Implement Customs Bills and WTO trade facilitation
• Refined approach to taxpayer segments (e.g small business)
• Regulation of intermediaries
• Improved management of complaints
• International exchange of taxpayer information
• Border management
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Thank You!
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