Kieswetter: Sars is stable

South African Revenue Service (Sars) Commissioner Edward Kieswetter says the institution has adopted a “politically neutral” methodology for detecting and selecting cases of tax non-compliance. 

“Regardless of your position in society, regardless of your status in society, if our case methodology places you on our radar then we will engage with such a taxpayer and we will seek to enforce our law and we will hold you accountable for you tax obligation,” Kieswetter told parliament’s standing committee on finance on Wednesday. 

The tax authority had previously been nearly decimated by political interference as highlighted in the Nugent Commission’s final report which showed the risks and damages associated with political interference at Sars.

No fear or favour

Kieswetter said the renewal of the revenue collector will see officials carry out its mandate without “fear or favour”, adding that he would rather resign than comply with any political request at Sars. 

Read: Report to allow criminal prosecutions by Sars at ‘advanced stage’

“Sars has to be independent [and] administer the laws professionally but also without fear, favour and prejudice … If any staff members allow themselves to be influenced by any third party … allow themselves to be co-opted and choose to collude [with third parties] … that is a red-card offence,” he said.

Responding to a question from ANC MP Gijimani Skosana about Sars action on recouping funds from corrupt activities, Kieswetter said the revenue collector has begun issuing letters of demand for over R28 billion in 2019/2020 compared to R3 billion in the previous year. 

He added that the institution is also involved in 570 investigations where it is estimated it will be able to recoup R4 billion.

Zondo-revelation cases

Within state capture projects, Sars is involved in 85 civil matters and 58 criminal ones that have arisen from revelations coming out of witness testimonies at the Zondo Commission of Inquiry into allegations of state capture Commission.

Seven of the civil matters have been finalised and 32 of the criminal investigations have been completed, while 27 of the matters have been handed over to the National Prosecuting Authority.

From its activities in combating financial and tax crimes, Sars has recovered R2 billion which consists of over 570 cash collections and detection and prevention of over R223 million in fraud attempts, Kieswetter said. 

Compliance declines

Kieswetter was presenting the institution’s 2021/2022 annual performance plan to the standing committee. He noted that under the current economic environment brought forward by the Covid-19 pandemic “tax revenue collection efforts will remain constrained and Sars is already experiencing declines in registered taxpayer and trader compliance levels”.

Part of the revenue collector’s objective to ensure tax compliance will see it implement a system that will make non-compliance difficult. 

“Taxpayers and traders who negligently, deliberately, aggressively, or criminally stay out of the tax system or do not comply will be detected immediately when non-compliance occurs,” Kieswetter said in a presentation to the committee. 

“They will experience a response appropriate to the nature and degree of their non-compliance, which progressively, may include friendly reminders to more intrusive and investigative engagements that enforce compliance.”

More stringent enforcement will see Sars issuing asset seizure orders, instituting court action and criminal prosecution. 

Kieswetter said although the road to recovery for the institution is still a long way ahead, Sars is “stable”.