SARS Commissioner Edward Kieswetter, pictured with Finance Minister Tito Mboweni, when his appointment was announced. Picture: Oupa Mokoena/African News Agency (ANA)
JOHANNESBURG - SA Revenue  Service (Sars) boss Edward Kieswetter has said that it was unlikely to meet its revenue estimates this year.

“It’s going to be hard” to reach the estimated R1.58 trillion of revenue the National Treasury forecast for the year that ends in February," Kieswetter said in an
interview this week.

“The revenue-recovery program depends on whether I get more resources. I’ll certainly keep trying.”

The government has cut the Sars' budget amid a fight for resources, hindering the organisation’s ability to do its work effectively.

Sars R9.45 billion allocation for this fiscal year is smaller than its total spending in the 2014 financial year.

Kieswetter, who took over as Sars commissioner in May inherited an institution that suffered “massive failure of governance and integrity” after the appointment of former head Tom Moyane in 2014, a commission that probed problems at the  body found.

“The resources that have been allocated to Sars have been significantly constrained, for no other reason that there just is no money,” he said. “Unless we have the resources to rebuild the capability, the project of restoring Sars is at risk.”

Weak economic growth has translated into lower-than- expected tax revenue from both citizens and companies, with a  total collection shortfall of R57.4bn in the year ended in March Sars said in April.

Sars, which employs about 12 500 people, has around 1 000 vacancies, 600 of which are critical, Kieswetter said.

Many skilled professionals left Sars under the previous administration, and Kieswetter wants to lure some of them back to boost the agency’s capabilities.

“There isn’t a single silver bullet to fixing Sars,” he said. “I cannot even tell you the full extent of what it means to fix Sars. The tragedy of Sars is microcosmic of the tragedy of South Africa.”

Finance Minister Tito Mboweni will present the mid-term  budget on Oct. 30.  Additional support of R59bn for cash-strapped power utility, Eskom will  probably push the fiscal deficit for this year much wider than the 4.5 percent of domestic product that was projected in February.

Mboweni reiterated that the aid, combined with lower expected tax revenue, would come at a significant cost to taxpayers. 

Mboweni “understands there are two sides to the coin of how much money you extract from the economy via taxes,” and is “very mindful” of the implications, Kieswetter said. To raise revenue, Mboweni will first make sure the agency functions effectively and see that cabinet colleagues “rein in their expenditure” before raising taxes, he said.

The Treasury in August said it has asked departments to prepare proposals on how to reduce expenditure in a way that has the least impact on service delivery. 

“Before you look at just adjusting policy, you first have to make sure that the money that’s due to you, you can collect,” Kieswetter said. 

BLOOMBERG