Sars to intensify revenue-enhancing strategies to tap into R300bn debt book, says Kieswetter

South African Revenue Service commissioner Edward Kieswetter.

South African Revenue Service commissioner Edward Kieswetter.

Published Feb 22, 2024

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South African Revenue Service (Sars) commissioner Edward Kieswetter on Wednesday promised that debt collection will be one of the revenue-enhancing strategies to be employed by the taxman during the 2024-25 financial year.

Kieswetter also said they have an opportunity to improve their administrative efficiency through investment made on their personnel and use of data science.

“We have seen great measurable progress in terms of significant focus on compliance efforts in the year we reported as at the end of January.

“We have seen about 4% increase in compliance,” he said when responding to questions during the post-Budget briefing of Parliament’s finance and appropriation committees.

On Wednesday, Finance Minister Enoch Godongwana said the budget contained tax measures that would raise R15 billion in 2024-25 to alleviate immediate fiscal pressure and support faster debt stabilisation.

On Wednesday, DA MP Dennis Ryder asked besides collection of taxes, where the rest of the revenue would come from.

Kieswetter said an area that would be a focus was debt collection.

“We have a debt book that is not disputed of about R300bn. What is required to harvest that debt is focused efforts,” he said.

“To date we resolved two million of such cases. That work resulted in additional R70bn that would otherwise not be in the fiscal numbers.”

He also said they would make use of data science or otherwise artificial intelligence.

“It is impossible to manually assess every return that is submitted to us. To date we have just 40 million returns submitted.

“One and half million of those are flagged as risk to the refund system. Our staff then do further verification work and have engagement with taxpayers.

“Just that work resulted in us preventing the outflow of R66bn,” he said.

He said the opportunity was there for Sars to improve administrative efficiency through investment in people and knowledge data.

“If we do that we are able to really to deal with the tax gap, the compliance tax shortfall.

“That has a sustainable revenue contribution that we believe over time will take pressure off the minister to borrow money and look for other sources of revenue,” Kieswetter added.

Briefing the committees earlier, National Treasury director-general Duncan Pieterse said there was a need for a much higher level of growth to create jobs in order to bring unemployment down.

Pieterse said the 2024 Budget prioritised macroeconomic stability, structural reforms and improved state capacity to improve the environment for public and private investment.

“Broad reforms are under way in energy, freight, water, and telecommunications. Yet it will take time to reverse the consequences of operational, maintenance and governance failures at state‐owned companies responsible for electricity, rail and ports,” he said.

Pieterse also said they were convinced that as the reforms were implemented, they would start to yield benefits needed to sustain the right kind of growth, jobs and inclusivity of growth required.

He said the Budget ensured development through sustainable public finances.

“In the context of persistently low economic growth, government will protect critical services, support economic growth through reforms and public investment, and stabilise public debt.”

Pieterse also said the government was staying the course to narrow the budget deficit and stabilise debt.

“This year, for the first time since 2008/09, government will achieve a primary budget surplus, meaning that revenue will exceed non‐interest expenditure.

“Over time, as the debt burden decreases, maintaining this critical benchmark will create fiscal space. A consolidated deficit of 4.9% of GDP is expected in the current year, narrowing to 3.3% of GDP by 2026-27.”

Cape Times