Inside Sars's R30bn hole
SEÁN MULLER: Is Sars right on the money?
Revenue collection affects the stability of public finances and service delivery, so it is important to know whether claims made about it are correct
Has the SA Revenue Service (Sars) misled the public on revenue collection achievements? After the 2016 budget, Sars commissioner Tom Moyane announced that it had collected R1trillion for the first time. Moyane and his team and spokesmen implied that this was thanks to their “restructuring” plan. Revenue collection is a function of four main factors: domestic economic activity, tax instruments & rates, taxpayer compliance and effective collection. Changes in the structure of the collector are unlikely to make a big positive difference to the amount collected, because the amount that can be collected is limited by economic activity and tax rates. As the economy grows, revenue collection will rise, even if no changes are made to tax rates and no measures are put in place to improve collection. In the 2014 medium-term budget policy statement — released before Moyane’s restructuring — treasury estimated that revenue collection would be R1.055 trillion for 2016. Moyane’s explanation is th...