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Competency and Capability RequirementsPresenter: Pheko Masebe

Government CIO SummitTowards reducing costs of doing business in

government and contributing towards achieving clean audit

Date: 29/05/2013

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Presentation Outline

• Introduction• SARS Overview• Operations – Technology division• IT Business• Capacity and competency building blocks• SARS Journey• Critical Success Factors

Collect all revenues due

Ensure Efficient & Effective Revenue Collection

Ensure Efficient & Effective Control over the Movement and Manufacturing of Goods

Advice the Ministers of Finance and Trade

SARS, like most tax agencies worldwide, has insufficient resources, to check at micro level, the compliance of individual taxpayers/traders

Therefore the strategy adopted is Voluntary Compliance

The SARS Mandate

Voluntary Compliance• Voluntary Compliance is based on two Fundamental Principles:

Make it easy as possible for those trying to comply

Make it very hard for those trying to avoid paying their fair share

Improve Service Improve enforcement

Some tax payers/traders will always try to comply

whether effective enforcement exists or not – people who believe in doing

the right thing

Some tax payers/traders will not comply whether

effective enforcement exists or not – the

criminals

The goal of voluntary compliance is to influence the undecided majority

who will choose one way or the other based upon how well we

implement this strategy

Key to this approach in ensuring that taxpayers/ traders understand their obligations

SARS’ COMPLIANCE MODELS SEEKS TO INCREASE VOLUNTARY COMPLIANCE

Enfor

cem

ent

Service

Education

Environmental Knowledge and Understanding

Effective Segmen-

tation

Risk Assessment

Customer Awareness

SARS’ COMPLIANCE MODELS SEEKS TO INCREASE VOLUNTARY COMPLIANCE

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SARS Volumetric

2,7 Million Import Transactions

1,8 Million SACU Movements

3000 Total Seizures

68, 775 Consignment

stopped

300, 268 PAYE

Employers

6.7 MillionIndividualTaxpayers

14 Million Passengers

moving through Customs

573, 876 VAT

Vendors

1, 4 Million Corporate Taxpayers

1,998, 221 Export

Transactions

23 Million Returns Processed

14 672 SARS

EMPLOYEES

MODERNISATION PERFORMANCE IMPROVEMENTS HAVE BEEN DRAMATIC…

All Taxes

Number of returns received electronically

% electronic submissions to total returns

Payments processed electronically

% electronic payments to total revenue

2006

1.6m

8%

R55bn

13%

2013

22.5m

98%

R759bn

93%

Personal Income Tax (PIT)

Number of returns filed electronically

eFiling

Branch Interface (Service Manager)

% electronic returns received

Number manual returns received

Average assessing turnaround times

2006

120k

120k 3%

0%

3%

4m

45-55 days

2013

6.7m

3.8m 58%

2.9m 41%

99%

10k

91% within 3sec

* Depending on Bank ProcessingAverage refund turnaround times 70% within 24hrs *

HISTORIC CHALLENGES

Systemic issues inherited by SARS:• Systems and Technology• Processes- focus was on functions -not integrated• Human Resources: limited skills in information technology,

management and accounting –• Financial- No standards for complying with annual financial

statements. • Communication and Service- Communication extremely poor

internally externally and with taxpayers. • Tax system- SARS inherited eleven tax administrations all with

different rate structures. • Customs- lack of systems and manual processes which

resulted in unreliable and inadequate data.

Create and replicate process

capabilities within

Government

Continuous Improvement of

Business Operations

Customs

Support

Risk Service

Tax

Modernisation

1. Product Design and Development

2. Process Solution Design and Implementation

• Architecture standards and methodology

• Solution delivery• Process Measurement and

Benefit Tracking• Continuous Improvement• Policies and Procedures• Conformance Auditing

1. Business Reporting and Analytics• Data analytics and mining• Business Reporting• Knowledge Management

2. Performance Management• Capacity Planning• Performance Dashboards

Build Capability

SARS embarked on a journey to transform into an effective and efficient organisation

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1. Set a baseline

2. Concentrate high volume work

3. Standardise processes

4. Organise work in pipelines

Siyakha

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Competency & Capability Building Blocks

Competency& Capability

Sourcing Strategy

Remuneration Structure &

Policy

SARS Learning Academy

Org Structure

Tools , Technology

and Resources

Metrics and Incentives

CultureLeadership Alignment

Accountability

PerformanceLong / Short term

success

BehaviourPassion

Collaboration

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Sourcing Strategy

Sourcing Third Party Services – Contract management competency utilised when sourcing Third Party services.– Developed internal competencies (Lawyers, Accountants, Auditors etc)– Weekly vendor engagements (All Suppliers every Thursday)

Talent Sourcing• Graduates

– In 2012 received seven thousand applications (7000)– Followed a robust selection process – Two hundred (200) final shortlisted graduates and fifty (50) appointed and placed in

different departments.

• Talent Database management– Modelled recruitment Agency – Talent database created to source candidates with required IT skills – Recruitment savings on an annual basis

REMUNERATION STRUCTURE

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• Remuneration practice within Technology division reviewed and an equitable, transparent and market based pay model introduced.

• Current remuneration solution addresses the attraction, retention and career management of appropriate IT skills.

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• Established SARS Learning Academy to support SARS culture of learning• In rolling out new technology, volumes of employees

have to be trained• SARS Learning Academy have capacity to provide

training therefore limit use of external service providers.

SARS Learning Culture

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• Organisation structure aligned to SARS Operating Model

• Technology structure elevated to a GE level• Currently 11 393 employees in Operations• There are 900 employees in Technology division

Organisation Structure

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Operations UNIT under COOAuditBranch OperationsBusiness SystemsCapacity ManagementCase SelectionCentralised Processing OperationsChief Information OfficerCompliance CentreContact CentreDebt Management & Finance OperationsHR - Compliance, Audit & Debt Management and Contact CentreHR - Modernisation, Technology & Ops EnablingHR - Operations - Service & ScanningModernisation Strategy & DesignOperational Service Escalations & SupportProgramme Management

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Technology, Tools and Resources

• Leverage technology to enable innovation• Dominant technologies used IBM and Microsoft• Intricate budget process involving business and

National Treasury especially for Modernisation Agenda

• Modern facilities

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Metrics and Incentives

• Vigorous engagement on scorecards• Adhoc Salary Increase and Promotions• Biannual process• Use 1% budget allocated• Internal growth opportunities• Opportunity to address pay disparity• Staff retention

Learning's• The absence of a public service model • Re-organising for efficiency across government ,

integration across government –reduce administrative burden- benefits of scale

• Value of people , processes and technology• Implementation of an ethical , business approach• Fostering confidence across government – increases

compliance • Creating a learning, sharing , holistic, integrated

continuous improvement culture across government

END