Revenue Conference 2014

Fair and Efficient Revenue Collection

220 years of Tax and Customs Administration

2nd Biggest Economy in Africa ( 25th in the World)

25% unemployment

2% Growth outlook

Negative Balance of Trade

Credit Rating: BBB

Tax revenue to GDP: 26%

Economic Overview

320 years of Tax and Customs Administration

We are a Revenue AuthorityTax and Customs administration in South Africa

Staff Compliment

15, 000 2,597 Customs Officers

SEA AIR LAND/ROAD RAIL

16 million individual taxpayers

2.7million companies

40k importers

245k exporters

3k clearing agents

Volumes (2013)

Number of Transactions/Declarations: 6 mil

Transaction Value R2,6 trillion (USD 253,7)

420 years of Tax and Customs Administration

SARS REVEUE COLLECTIONS

On average Customs contributes

about 20% of total SARS revenue collection

F/YTotal tax

(R'billion)Total tax

(US$'billion)2006/07 495.5 70.4 2007/08 572.8 80.3 2008/09 625.1 70.6 2009/10 598.7 76.5 2010/11 674.2 93.7 2011/12 742.6 99.8 2012/13 813.8 95.7 2013/14 899.8 88.8

520 years of Tax and Customs Administration

Elements of Customs Revenue

The Customs Division is primarily responsible for collecting all trade-related revenue, however it is also collects other revenue such as environmental levies on imported

incandescent light bulbs.

620 years of Tax and Customs Administration

Predictable and Transparent Customs Procedures Consistent application of the law Independent/effective appeal mechanisms Ability to effectively address unfair practices (levelling the playing field)

What do we understand by Fairness

Ease of doing business/ make it easy to comply Removal of unnecessary impediments for legitimate trade Doing more with less/ utilising limited resources in response to the ever

increasing mandate

What do we understand Efficiency

720 years of Tax and Customs Administration

To enhance fairness and efficiency the WCO calls for:

WCO Revenue Package Areas of Focus

Impact of SARS effort

Trade Facilitation measures SARS’ accession to the RKC : Implementation of customs clearance by

procedure. Implementation of simplified procedures.

Enhanced Customs controls in valuation SARS is rebuilding this area as we have lost a number of personnel to the private sector .

We are working with the WCO to assess our capability gap.

Implemented a new integrated Customs processing system and tariff engine.

Improved Classification capability

Better control of benefits arising from preferential agreements

Improved compliance and enforcement We have publicised a Compliance Programme

Introduction of the Preferred Trader initiative - foundation for the AEO programme with Trade

SARS efforts/ alignment 0% 100%

820 years of Tax and Customs Administration

The following Challenges continue to erode the revenue base resulting in revenue leakages:

® Under-valuation ® Under-declaration ® Mis-declaration ® Smuggling

Challenges to Revenue Collection

920 years of Tax and Customs Administration

Customs ProgrammesSegmentation of the trade to

allow for customised service and risk application

Use of technology to enhance Customs

Control

Risk Management Simplification and Modernising Customs Law

Customs System Overhaul

Improvement Efforts @ SARS

Efficiency

1120 years of Tax and Customs Administration

Settlement Committees Compliance with the Promotion of Administrative Justice Act (PAJA)

Governance structures - Fairness

Portfolio Committee on Finance

Service Monitoring Office

Internal Audit

Tax Ombud

Ensuring fair treatment of public

and taxpayers

Thank You !