Sars commissioner stays on for a little while longer

Edward Kieswetter, commissioner of the South African Revenue Service (Sars), will remain in his position for a while longer. His term of office was supposed to end on 30 April.

The Presidency said in a statement that his tenure has been extended to enable an orderly transition in the organisation. It is unclear how long he will remain at the helm.

Kieswetter was appointed in 2019 after President Cyril Ramaphosa fired his predecessor, Tom Moyane, who was a close ally of former president Jacob Zuma. Zuma will be remembered as the president who allowed his state to be captured by political and economic opportunists.

Restoring trust

Kieswetter has made enormous inroads in restoring operational efficiency and trust in the tax agency. He played a critical role in ending the reign of terror under Moyane.

In 2022, Kieswetter publicly apologised to several former Sars employees whose lives, livelihoods and reputations were destroyed during the organisation’s years of capture. He expressed his deep regret for the hurt, pain and suffering visited upon the former employees and their families because of the witch-hunt by Zuma’s keepers from 2014 to 2018.

Read/listen:
Public apology and financial compensation for former Sars employees
Why Sars had to apologise to former employees and compensate them

In June last year, Kieswetter announced the appointment of three deputy commissioners to strengthen his executive team. Their appointment follows recommendations made in the final report of the Nugent Commission of Inquiry into Tax Administration and Governance.

The new deputies – Johnstone Makhubu, Carl Scholtz and Bridgitte Backman – have a wealth of experience in business operations, information technology and turnaround strategies.

Read:
A look at how Sars is rebuilding itself
Legislation to prevent state capture on its way

Makhubu has been with Sars since 2016, while Scholtz has been involved in business turnarounds in posts at Comair, SA Breweries, Pick n Pay Retailers and the Johannesburg Stock Exchange.

Backman has been described as a seasoned business leader with extensive expertise across a range of industries, such as development finance, energy, and food and beverages.

Tax collections

Since its inception, Sars has collected close to R20 trillion for the country’s social and economic development. The revenue target for the 2023/24 tax year was revised downward by almost R57 billion to R1.73 trillion in October last year.

This lower estimate is largely due to struggling companies and consumers, resulting in lower collections from company profits and value-added tax (Vat). Tax revenue from companies is expected to bring in R300 billion, almost 36% less than budgeted for in February last year. Vat is expected to generate revenue of R446 billion, which is close to 26% lower than anticipated a year ago.

Read: Sars set to squeeze taxpayers for more

Finance Minister Enoch Godongwana will deliver his budget on 21 February. He has already indicated that government must raise an additional R15 billion in the 2024 budget.

Tax commentators have cautioned against increasing personal income tax rates, noting that it is not “viable in the current economic climate”. A substantial cost-cutting exercise is critical to averting further deterioration in the fiscal situation. But, says George Tshesane, government and public services leader at Deloitte, this may not be feasible in an election year and is a route government has historically avoided.

Read:
Godongwana warns of difficult budget next month
Budget expectations in an election year