South Africa: SARS Intensifying Revenue Collection Efforts

21 February 2019

The South African Revenue Service (SARS) is intensifying its effort to identify and bring to book tax dodgers.

This comes after revelation that the revenue collector is launching units aimed at tackling the illicit tobacco industry and big business. The illicit economics unit was launched late last year, while the large business unit is expected to come to life in April.

Addressing reporters during a press briefing on Wednesday, Finance Minister Tito Mboweni said it is important that revenue collection efforts are intensified.

Speaking alongside the Minister was acting SARS Commissioner Mark Kingon, who said the revenue collector is zoning in on many areas that need special focus.

This week, reports emerged of a court sheriff order being issued to an alleged businessman in the tobacco black market. Mboweni said many such cases would come to light.

"[This is] in terms of the illicit economy to ensure that what is needed to be rendered to Caesar is rendered to Caesar. So you are going to see, and you are seeing, action in the tobacco space. You have seen commentary around the R7 billion [loss in illegal cigarette sales].

"In the fuel space, we are seeing considerable amounts dripping and ghost exports, where duties are not being paid.

"In clothing and textiles, there's an effort to firstly detect illicit duties, the economy and the jobs in that [space].

"There are comments being made at the State capture commission, where direct notices have been given regarding tax abuse, fraudulent invoices being created and the splitting of salaries. These things are being dealt with by the Unit."

Meanwhile, Kingon announced that SARS was beginning to reduce its VAT credit.

"... At the MTBPS [Medium-Term Budget Policy Statement] we had a R20 billion addition allocated for refunds for VAT. The credit book for VAT peeked at about R41 billion in September of last year. We are grateful that as of [Tuesday, 19 February], we were sitting at about R24.8 billion VAT credit. So we have brought it down quite significantly, thanks to the efforts of various factors. The team is working extremely hard and obviously looking at our risk processes," Kingon said.

The large business unit will be announced at a formal launch in April.

"It is through these efforts that we can finally deliver what is needed by Caesar," Kingon said.

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