Thousands of staff at the SA Revenue Service (Sars) could down tools on Thursday as they push for a double-digit wage increase at an agency that has consistently missed its revenue targets for the past four years.

Meetings will continue on Monday, but the parties remain far apart. Unions are demanding a one-year agreement and an 11.4% increase, while Sars is offering 7.1% in the first year of a three-year inflation-linked agreement.

Unions at Sars maintain that their members are being prejudiced by years of mismanagement at the agency, and are being pushed to meet increased revenue targets while posts are going unfilled and benefits are being rolled back.

The Sars bargaining council covers just fewer than 10,000 employees, with about 5,300 represented by the Public Servants Association (PSA) and 4,400 by the National Education, Health and Allied Workers Union.

PSA labour relations officer Stefan Viljoen said on Sunday the reduction of benefits at Sars is adding to the wage dispute, with Sars seeking to withdraw, among other things, leave payouts and bursaries.

“Some state-owned enterprises are receiving bailouts constantly, while Sars has been effectively retrenching staff by not filling vacancies,” said Viljoen. “Staff are being asked to commit to higher revenue targets, which must be achieved with fewer people.”

Sars said on Saturday it is confident an agreement will ultimately be found, but any agreement will need to account for reduced government revenue and higher debt levels. “Both Sars and its employees remain committed to the higher purpose of collecting all revenues due to the state, and facilitating legitimate trade in and across SA’s borders,” it said.

Unions lodged a dispute in February, and the Commission for Conciliation, Mediation and Arbitration (CCMA) issued a certificate of nonresolution on March 19.

The current three-year wage agreement that Sars has with organised labour expires on March 31.

The CCMA commissioner tabled a proposal for settlement of an 8% increase across the board for a single term, which organised labour rejected‚ deciding not to move from its demand for an 11.4% increase across the board. However‚ after further mediation‚  unions presented a 9% increase as a settlement offer. Sars maintains it cannot afford this and is instead offering a differentiated increase of an average 7%.   

Sars has consistently missed its revenue collection targets, with finance minister Tito Mboweni saying in February that the shortfall for the 2019/2020 financial year is expected to be R42.8bn, revised upwards from the R27.4bn estimated in October 2018.

About half of this was due to higher-than-expected VAT refunds, Mboweni said at the time. Allegations have been made that Sars, under the leadership of former commissioner Tom Moyane, deliberately withheld VAT refunds to boost tax revenues.

Retired judge Robert Nugent, who chaired the commission of inquiry into Sars, concluded that Moyane’s restructuring eroded collection capacity and caused an exodus of skilled senior managers and executives.

With Linda Ensor