The SA Revenue Service (Sars) is becoming more efficient in tackling tax dodgers, beneficiaries of the proceeds of crime and those involved in corrupt activities, President Cyril Ramaphosa said on Monday. 

In its preliminary tax revenue collection outcome, Sars said it had collected more than R1.5-trillion between April 2021 and March 2022. This was a 25% improvement from the previous year.  

Writing in his Monday weekly newsletter, the president praised the agency for progress it made in the past two decades and what he referred to as important milestones in building a capable state.  

“Through the R17.8-trillion Sars has collected since its establishment in 1997, we have been able to build more social infrastructure such as clinics, schools and hospitals, upgrade and build new roads and support society’s most vulnerable through social grants and other measures,” he said. 

“When tax revenue collection systems and their supporting legislation are efficient, uncomplicated and equitable, it encourages greater compliance.”

Ramaphosa said tax collection from JSE-listed companies, multinationals and wealthy individuals is now more effectively managed through Sars' large business unit, which was relaunched in 2020.

The agency, which once grappled with mismanagement, is now well established as one of the most efficient tools to combat corruption, he said.

“As a result of Sars' turnaround, there has been improved compliance in personal income tax, corporate income tax and pay as you earn. Sars is taking the wind out of the sails of tax dodgers, beneficiaries of the proceeds of crime and those involved in corrupt activities.

“In cases where an individual’s lifestyle does not match what they declare, Sars has been conducting lifestyle audits. In the past year, Sars has completed lifestyle audits that resulted in the collection of R474m.”

Restoring the stability and credibility at the revenue service and other entities was high on his agenda when he was elected president. 

“Like other important institutions, Sars had suffered from the ill-effects of state capture, with political meddling, mismanagement and other factors seriously affecting its efficiency. This resulted in not only undermining taxpayer morality, but also loss of business confidence in the organisation.”

In 2018, Ramaphosa appointed a commission of inquiry into tax administration and governance chaired by retired judge Robert Nugent.

In the same year, the Nugent commission delivered its report which made several recommendations Sars has since implemented, according to Ramaphosa.

“Sars has driven a focused turnaround strategy to position itself at the forefront of efficiency and service excellence. It has a programme to promote tax morality and compliance."    

While the leadership of Sars had to be complimented on its performance, he also hailed loyal taxpayers.

“Thanks must go to the loyal SA taxpayer. Without their co-operation, the latest revenues would not have been possible. That Sars has expanded the tax base with 1.8-million new registrations over the past year is another sterling achievement.  

“As we forge ahead with efforts to strengthen the capacity of the state and rebuild institutions that were systematically weakened by state capture, we have much to learn from what Sars has achieved in a relatively short space of time.”

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