2015/16 2019/20 strategic plan & 2015/16 annual...
TRANSCRIPT
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2015/16 – 2019/20 STRATEGIC PLAN & 2015/16 ANNUAL PERFORMANCE
PLAN Presentation to SELECT COMMITTEE ON FINANCE
22 SEPTEMBER 2015
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OUTLINE
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SARS STRATEGIC INITIATIVES 2015/16 – 2019/2020
SARS STRATEGY & DIRECTION 2015/16 – 2019/20
SARS OPERATING MODEL REVIEW
SARS EXPENDITURE ESTIMATES
SARS PROJECTED HUMAN RESOURCES CAPACITY
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SARS LEADERSHIP TEAM ACCOMPANYING THE COMMISSIONER…
2
Jonas Makwakwa (Acting Chief Officer: Operations)
Makungu Mthebule (Acting Chief Officer: Strategy, Enablement and
Communication)
Matsobane Matlwa (Chief Financial Officer)
Katiso Tabe (Acting Group Executive: Strategy and Risk)
Sandile Memela (Executive: Media and Public Relations)
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SARS STRATEGY & DIRECTION 2015/16 – 2019/2020 (pgs 19 – 27 of SARS Strategic Plan)…
3
In a nutshell, SARS will…
Continue to improve the way SARS operates and works to meet the
growing needs of taxpayers , and reduce administrative burden
Continue to invest in SARS employees to serve taxpayers better and to
address sophisticated tools and schemes used by those taxpayers that
want to avoid/evade paying their taxes
Continue to collaborate with all of our stakeholders to strengthen our
compliance efforts
Continue to apply risk management principles to focus our efforts on
areas where we will have the biggest effect on compliance
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SARS STRATEGY & DIRECTION 2015/16 – 2019/2020 …(continues) (pgs 19 – 27 of SARS Strategic Plan)
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In a nutshell, SARS will…
Continue to use technology and available data intelligently to build a single
economic view of taxpayers across many interactions,
Improve services to taxpayers, identify those taxpayers that fail to meet their
tax and customs obligations, and to improve our internal efficiency and
effectiveness
Continue to educate taxpayers and potential taxpayers to improve
compliance, and to realise our objectives of an active and engaged citizenry
Improve access and availability of SARS’ services to all citizens and taxpayers
wherever they might be
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KEY SARS STRATEGIC INITIATIVES (pgs 29 – 39 of SARS Strategic Plan & pgs 17 – 26 of the SARS APP)
To increase customs compliance, SARS will:
Implement the Customs Control and Customs Duty Acts, 2014
Improve management of bonded warehouses - During 2015/16
we will introduce: mobile security system; off-site tracking &
management system; a new case management system
Deploy additional cargo/container & baggage scanners at our key
ports of entry
Implement the Model Port Pilot project at selected ports of entry
Continue to facilitate implementation of the One Stop Border Post
between SA & Mozambique, and SA & Zimbabwe
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To increase tax compliance, SARS will:
Implement SARS’ Compliance Programme – conduct work in the 7
focus areas – Large Businesses/Transfer Pricing; HNWI & Trusts; Small
Businesses; Tax Practitioners & Trade Intermediaries; Illicit Cigarettes;
Construction Industry; Clothing & Textiles Industry
Implement processes to reduce debt owed by taxpayers to SARS
Rollout small business desks at our branch offices to support
small business compliance- over 130 small business desks rollout
to date
Continue to work with other tax jurisdiction and countries on
global tax compliance and enforcement issues to protect the
erosion of South Africa’s tax base – Implement FACTA agreement
between South Africa and USA (came into effect in October 2014) 6
KEY SARS STRATEGIC INITIATIVES…(continues) (pgs 29 – 39 of SARS Strategic Plan & pgs 17 – 26 of the SARS APP)
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To increase ease and fairness of doing business with SARS, SARS
will:
Deliver an integrated complaints management process for
taxpayers
Deliver an improved Dispute Resolution Management Process
Deliver an improved Tax Clearance Certificate (TCC) process and
system
The TCC system will interface with the proposed National Treasury’s Central
Supplier Database (CSD) to enable a paperless and online verification of tax
clearance status of suppliers wanting to do business with Government!
Partner with the DHA through Thusong Centers for co-locations
Establish SARS “kiosks” at selected shopping malls and centres
7
KEY SARS STRATEGIC INITIATIVES…(continues) (pgs 29 – 39 of SARS Strategic Plan & pgs 17 – 26 of the SARS APP)…
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To increase cost effectiveness, internal efficiencies and institutional
respectability of SARS, SARS will:
Continue with the migration of SARS’ accounting practices to
Generally Recognised Accounting Practice (GRAP 23)
Deliver and implement a revised Code of Ethics and Conduct
Implement a new HR framework including a new Talent
Management Model
Implement a revised SARS operating model to eliminate
duplication and improve efficiencies and effectiveness of our
business practices
8
KEY SARS STRATEGIC INITIATIVES…(continues) (pgs 29 – 39 of SARS Strategic Plan & pgs 17 – 26 of the SARS APP)
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IN OUR 2014/15 STRATEGIC PLAN WE UNDERTOOK TO
CONDUCT A REVIEW OF THE SARS…
• Current state assessment of the organisation, its processes &
practices.
• Review of the SARS operating model.
• Review of SARS governance and decision making processes.
• Creation of a roadmap to align the organisation to the new operating
model.
Operating
Model
Review
ICT &
Modernisatio
n Review
• Information Technology strategy review.
• Architecture and technology review.
• IT sourcing/procurement governance review.
• Application development and project management review.
• Determine return on investment (ROI) of past expenditure on
modernisation.
• Current project status – achievements against the plan & cost incurred
vs original budget.
• Review IT contractual agreements / service level agreements and
ownership of intellectual property.
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Increased ease and fairness of doing business
Establish a Customer Centric Approach (Service Charter)
Integrate Service Channels and establish a single contact
point for Tax and Customs
SARS OPERATING MODEL REVIEW OBJECTIVES…
To improve SARS capacity to handle its internal and external functions and relationships through:
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Strengthen Accountability
Maintain a clean Tax and Customs Register (Clean taxpayer records/
accounts)
Effectively utilise SARS Economic Research and Analysis data
Tighten Governance Compliance
Apply Cost Containing Principles
SARS OPERATING MODEL REVIEW OBJECTIVES…(continues)
To improve SARS capacity to handle its internal and external functions and relationships through:
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Increase Tax and Customs Compliance Level
Taxpayer/trader profiling (Allocate status levels to taxpayers)
Entrench an Employee Centric Approach - Protect our Specialist
Skills
Apply A Systematic Compliance Enforcement Approach
SARS OPERATING MODEL REVIEW OBJECTIVES…(continues)
To improve SARS capacity to handle its internal and external functions and relationships through:
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Develop solutions and
detailed plans to realise
improvements
How to do it?
Conduct current state
assessment and identify
areas for improvement
1
3
DIAGNOSTIC DETAILED SOLUTION
IMPLEMENTATION
We are here
What to do?
Implement solutions to
drive change
Doing it!
SIGNFICANT PROGRESS HAS BEEN MADE…
We are currently developing solutions & detailed plans to realise improvements for both
reviews
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Pursuant to the operating model review diagnostic, we have defined our
transformation ambition and key strategic focus areas…
Turnaround
Customs and
Excise
Address the tax
gap and
increase
taxpayer
compliance
Become a
customer centric
organisation
Build a high
performance
culture and
operations
Improve information services and technology – at the service of our
organisation
Implement a revised operating model to support our strategic priorities
1 2 3 4
5
6
SARS will materially increase revenue, ensure strong control
over its border posts and become a customer and employee
centric organisation in order to move South Africa forward
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Customs and Excise: Regain port control, increase
border control, facilitate trade and increase revenue
1
Detect and
manage risk
accurately
Improve
stakeholder
management Develop a highly
effective
inspection / audit
team
Improve control and
flow of goods at ports
Ensure staff
adequately
equipped with
skills, resources
and equipments
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Tax:
Maximise taxpayer
revenue and
compliance
2
Launch
comprehensive
approach to address
HNWI tax gap
Expand BEPS team
and enforce
penalties on Large
Corporates
Develop targeted
initiatives to address
SMME non-
compliance
Improve data
management and
case selection
effectiveness
Build capacity and
capability to enable
Audit, Enforcement &
Debt
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Customer Service:
Provide high quality and
efficient customer service
3
Reduce volumes
by automating
and migrating
activity
Maximise efficiency
by optimally utilising
people and resources
Deliver consistent, effective
service by embedding a
customer centric approach
Create the service
channel network
of the future
Increase focus
on taxpayer
education
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4
People and Operations:
Develop a high performance
culture and operations
Refine performance
management and implement
talent strategy
Align resourcing with
strategic priorities where
they will have the largest
impact
Develop capabilities
including a tax research
Institute and data
analytics
Optimise our existing process
and supporting data
architecture to meet business
needs
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5
Information services and technology:
Fit for purpose IT systems,
implementation of global best practice
and strengthening of big data capability
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6
Operating model:
Launch new operating model
to allow our organisation to
be transformed and our
strategy to be executed
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SARS revised operating model which was approved by the Minister of
Finance was recently communicated to the organisation…
Organisational structure
Balanced structure aligned with SARS strategic priorities
Accountabilities
Clarified decision rights with single
point of accountability
Governance
Simple, effective governance
structures and procedures
Values
Customer centric, valued, high
performance culture, continuous
improvement
Capabilities
Focus on employee development and
building tax / customs expertise
6
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Business model will be simpler and better aligned with the
achievement of our core mandate and strategic priorities…
Tax and Customs &
Excise business units to
drive our strategic
agenda…
Enabled by Digital
Information Services
and Technology and
Enforcement
functions…
And supported by
corporate support
functions…
Tax – Business and
Individual Customs and Excise
Digital Information
Services and
Technology
Enforcement
Finance Legal Counsel
Human Capital
and
Development
Strategy and
Communicatio
ns
Internal Audit
Tax Institute
(incl. Tax
Academy)
6
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SARS TRANSFORMATION PLAN TO BE IMPLEMENTED OVER
THE NEXT FEW YEARS…
OPERATING MODEL
By 2017 SARS will become a customer centric organisation with a
meritocratic culture, which moves South Africa forward through a material increase of
revenues and strong control of border posts
SERVICE
CHANNELS
CUSTOMS & EXCISE TAX COLLECTION
Volume reduction /
migration Workforce efficiency Customer-centric operations Network of the future
Organisation transition/
design
PEOPLE AND CAPABILITIES People strategy (Talent, capability, perf.
mgt) Tax, Customs & Excise Institute
DATA INTELLIGENCE
Register integrity & classification Data analytics
Governance / decision rights Process improvement SARS
Policy
SARS will materially increase revenue, ensure strong control over its border posts and become a customer and employee
centric organisation in order to move South Africa forward
Incremental tax and customs revenue collection Customer and employee NPS
STAKEHOLDER MANAGEMENT AND REGULATORY CHANGES
Government regulations (laws, by-laws, decrees…)
IT TRANSFORMATION
(TBD)
National and international stakeholder management
FU
ND
ING
MO
DE
L
HNWIs profiling
and VDP
campaign
SMME audit &
cash economy
reduction
Large Corporates
BEPS control
Penalty management & application
Debt collection prioritisation and efficiency
Audit coverage and quality
Case selection rules and prioritisation
Customs control from origin
to depot
(Import/Export/Excise)
Excise coverage/inspection
Penalty policy and application
Trade facilitation (incl. Preferred trader, one-stop border post)
Customs enforcement strategy including introduction of tactical
team
Case selection approach and rules
Trusts and 3rd party data sourcing
(Tax/Customs)
Capability sourcing
Org
rightsizing
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2
4
• SARS will transition to align itself to the new Operating Model.
– Will minimise disruption through the transition process and maintain
focus on core operations and revenue collection.
– Appointment of new COs to take place in September 2015. Interviews
have taken place. Minister’s approval for the appointments to be
obtained.
– Full transition of organisation to be completed by 31 March 2016.
• Finalise the detailed transformation plan, prioritise implementation
solutions and commence implementation.
• Implementation to commence in October 2015.
Operating
Model Review
ICT &
Modernisation
Review
• SARS has taken all the Gartner recommendations on board and Gartner
has recently been appointed to conduct Phase II of the IT Renewal
program.
• The Phase II program consists of seven strategic IT projects that will
be delivered and rolled out during the next 18 months.
• Appointment of a new Chief Officer: Digital Information Services &
Technology.
• Appointment of external Forensic Auditors to further investigate potential
deviations or violations of the PFMA identified.
• A detailed return on investment analysis of Modernisation expenditure to be
conducted.
KEY NEXT STEPS…
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SARS’ EXPENDITURE ESTIMATES OVER THE MTEF (strat plan pg 46)
9 754 46510 534 822
11 377 608
883 308
2016/17 2017/18
Initiatives and projects
Business As Usual
10 637 773 11 109 822
575 000
11 920 608 543 000
+4%
+6%
2015/16
+7%
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SARS’ HUMAN RESOURCE CAPACITY (strat plan pg 46)
13 350 13 150 13 300
50
Permanent Employees
14 196
421 425
13 600
400 50
13 700
350
Temporary Employees
2015/16 2016/17 2017/18
Graduate trainees
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Thank you