2014/15-2018/19 STRATEGIC PLAN & 2014/15 ANNUAL PERFORMANCE PLAN - - PowerPoint PPT Presentation

Presentation to the Standing Committee on Finance 01 July 2014

2014/15-2018/19 STRATEGIC PLAN & 2014/15 ANNUAL PERFORMANCE PLAN

Agenda

• SARS Mandate
• Highlights of SARS business
• SARS Strategy
• Strategic outcomes

2

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

3

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

5

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

6

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

Core process 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/

• rganisation

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

Rand Value R'000

Year

Projected Cost ENE Allocation

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% 14 310.9 , 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

Revenue growth 1994-2014

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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%

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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