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SOUTH AFRICAN REVENUE SERVICE ANNUAL REPORT 2012 - 2013

Presentation to the Standing Committee on Finance 18 September 2013. Presentation to the Standing Committee on Finance 18 September 2013. SOUTH AFRICAN REVENUE SERVICE ANNUAL REPORT 2012 - 2013. Introduction - Highlights for the Year. SARS Annual Report for the year ending 31 March 2013.

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SOUTH AFRICAN REVENUE SERVICE ANNUAL REPORT 2012 - 2013

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  1. Presentation to the Standing Committee on Finance 18 September 2013 Presentation to the Standing Committee on Finance 18 September 2013 SOUTH AFRICAN REVENUE SERVICE ANNUAL REPORT 2012 - 2013

  2. Introduction - Highlights for the Year • SARS Annual Report for the year ending 31 March 2013. • Progress against the SARS Strategic Plan and Annual Performance Plan tabled on 27 March 2012.

  3. For the year under review • Revenue Collected: • SARS collected R814bn; • R4bn in excess of the revised target of R810bn; • Representing 25.3% of GDP. • Resources used: • SARS total expenditure - 1.07% of the total tax revenue – in line with international trends; • The staff complement 14,780 ( may have reached 30,000 without modernisation • The tax register • 19.5 million in total; • Comprising 15.4 million individual taxpayers and other legal entities • Returns received • Over 4million income tax returns for the year (5.6m in total); • over 2million VAT returns; • over 3million PAYE returns • nearly 21million lines of customs declarations • SARS processed all personal income tax returns in an average of less than one day. • Dealing with exceptions • Nearly 1.5million audits of various types, and • 1,129 investigations into possible serious tax and customs offences. • Reduced taxpayer debt by R6.4bn (including cash collected and write-offs)

  4. Areas where we did not meet our goals for 2012/13 Commentary on performance Achievement against target Source: SARS Annual report

  5. SARS collected a record R813.8 billion in 2012/13, continuing its high-growth trajectory… Total tax revenue collected R billion SARS has achieved double-digit revenue collection growth since 1994 +11.7% p.a. Source: SARS 2012/13 Annual report pg. 15-19; SARS internal data

  6. SARS collected a record R813.8 billion in 2012/13, continuing its high-growth trajectory… Annual growth in tax collections Percentage (%)

  7. SARS collected a record R813.8 billion in 2012/13, continuing its high-growth trajectory… Annual growth in tax collections Percentage (%)

  8. % Revenue per tax type in 2012/13 (p17) Source: SARS 2012/13 Annual report pg. 17

  9. Tax to GDP ratio trendline Tax to GDP ratio R billion % Source: SARS 2012/13; Annual report pg. 18

  10. …Debt reduced by R6.4 billion…. Overdue Debt R billion % Source: SARS 2012/13; Annual report pg. 34

  11. Outcome 1 : Increase customs compliance Performance and organisational highlights Customs revenue amounted to R151.1 billion* (R0.9 billion above target) Preferred trader programme 154 traders were audited Decline in illicit economy through 3 298 illicit cigarette contraband seizures. SARS seized nearly 54 million contraband cigarettes with a street value of R37 million *Customs Revenue consists of Import VAT, Customs Duties, Miscellaneous customs & excise and Incandescent light bulb levy. Source: SARS 2011/12; Annual report pg. 20-26

  12. Outcome 2 : Increase tax compliance Performance and organisational highlights • Tax Revenue (Excl. Customs) amounted to R662.8 billion • (R2.8 billion above target) • PIT R276.7 billion (10.1 % growth) • CIT R160.9 billion (5% growth) • VAT R103.6 billion (16.4% growth) • Taxpayer register • Total SARS register - 19.5 million registered taxpayers and traders (11% increase) • Income Tax for Individuals register, 15.4 million (12.5% increase) • Filing on time • PIT 86.05 % (3.47% improvement) • PAYE 71.25% (4.12% improvement) Source: SARS 2012/13; Annual report pg27-31

  13. Outcome 2 : Increase tax compliance Performance and organisational highlights • Declaration Compliance • Total audit cases completed 1.5 million (42% increase) • 246 Criminal prosecutions received a guilty verdict, resulted in fines of R21.3 million and effective prison sentences of 133 years • Filing season • 5.6 million returns received in filing season – 16.47% higher than 2011/12 • 99.58% income tax returns assessed within 24 hours • 94.5% income tax refunds paid within 72 hours of submission • Processing of company returns improved from nearly 3 days to less than 1 day in 2012/13 Source: SARS 2012/13; Annual report pg. 31-33; 38-39

  14. Outcome 3 : Increase ease and fairness of doing business with SARS Performance and organisational highlights Faster e-filing solution and new eFiling mobile solution was introduced Improve turnaround time at border posts due to the introduction of the re-engineered Customs front-end solution Better taxpayer service and quicker resolution of queries due to the introduction of the Service Escalation and Support team. Callers receive live assistance to guide them through their queries after the implementation of the new SARS Help-You-eFile service. Source: SARS 2012/13; Annual report pg. 45-51

  15. Outcome 4 : Increase cost effectiveness, internal efficiency and institutional respectability Cost of revenue collection % R billion Most countries’ ratio ranges around the international benchmark of 1%, with USA at a low of 0.6 % and Germany at a high of 1.5%. Brazil and Russia’s ratio is also around 1%. Source: SARS 2012/13; Annual report pg. 52-53

  16. Human Capital numbers and Employment Equity ratios have remained stable Human Capital and Employment Equity % PDI in mgmt > 59% Women ratio = 62% Women in mgmt ~ 41% Disability rate = 2.03% Source: SARS 2012/13; Annual report pg. 61

  17. Thank you

  18. Tax revenue performance by tax type for 2012/13 Source: SARS 2012/13; Annual report pg. 16

  19. Budget revenue performance for 2012/13 Source: SARS 2012/13; Annual report pg. 16

  20. Global collaboration with other stakeholders Stakeholder Description of collaborative efforts SARS holds the Chairperson’s position and the position of the interim secretariat of ATAF ATAF SARS was elected as the Deputy Vice Chair of the WCO Eastern and South African Region WCO Mr Kosie Louw was elected as Chair for 2013/14 GFTEI SARS championed the “Tax Inspectors without Borders” initiative and hosted the 5th plenary meeting. FTA SARS continues to build on existing partnerships and explore new opportunities for co-operations. SARS hosted the inaugural BRICS Heads of Customs Administrations meeting. IBSA BRICS Source: SARS Annual report, pg. 63-64

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