South African Revenue Services commissioner Tom Moyane found sympathy from the ANC benches in Parliament as he bitterly complained about a negative narrative against the institution he leads and when he explained the revenue collection decline.
Moyane was leading a Sars delegation which appeared yesterday before Parliament’s standing committee on finance to present a quarterly report for the term ended December.
He complained about having to do this in the middle of a tax collection season, especially with three days left before the financial year ends.
“Being here places a huge burden because it is defocusing us on the work at hand,” he said, before focusing on the negative narrative against the revenue service.
These had been made in the media, by social and political commentators and in the political arena, he said, adding that such commentary or distractions as he called it, was extremely damaging to Sars as an institution that enjoys international respect as a leading government agency.
“It must be remembered that Sars collects about 90% of all government revenue and should this be impaired in any way, the country will face unprecedented damages,” said Moyane.
“Those that choose to launch unwarranted and unsubstantiated attacks on Sars must understand that they could be sabotaging our economy. These attacks not only impact negatively on the reputation of the organisation that I lead, and in turn on the compliance of taxpayers, but impacts extremely negatively on the morale of the 14 500 men and women of Sars,” he added.
The Sars staff had consistently delivered on the many challenges faced by our country over the years and their dedication and commitment to our country was unquestionable, he said.
Moyane warned that the “tale” of Sars having lost all its technical competence “will play itself out as a self-fulfilling prophecy as many of our staff is highly marketable and will not tolerate their reputation to be impugned in this manner”.
Moyane argued that contrary to the “negative narrative” that is being perpetuated where Sars is painted as an organisation that is falling apart, things were in fact “falling within the ambit of what we do”.
Moyane also complained about the media and commentators choosing to articulate opinions of former officials of Sars and not seeking clarity from Sars within reasonable time.
“The current onslaught on the integrity of this organisation – we have noticed this beginning to impact on the confidence of South African tax systems by taxpayers from across the spectrum. We are seeing the beginning of a disturbing trend whereby tax compliance levels are beginning to deteriorate. We are already contending with dire local and global economic conditions which impact on our revenue collection ability.”
He said the drop in confidence in Sars was already noticeable, adding any compliance drop will impact negatively on the attainment of the 2016-2017 tax revenue estimate of R1.144 trillion which has the potential to adversely affect the overall fiscal framework of South Africa.
The printed revenue estimate for 2016-2017, announced in February, of R1.174 trillion constituted a nominal 9.8 % revenue growth year on year.
At that stage the GDP growth focus was anticipated to be 1.02% but the economy is performing at 0.3%, he added.
Moyane explained that the revision of the revenue target was a regular occurrence that takes into account a range of factors such as economic performance of the country, growth, unemployment levels, among other things.
He said the significant downward revision from the printed estimate of R1.174 trillion by R30 billion for the 2016-2017 financial year was not about Sars’ ability to collect revenue but could be attributable to a number of factors.
Clearly taking aim at Finance Minister Pravin Gordhan, Moyane said it was not the first time that there was a deficit in revenue collection.
The R30 billion that we speak about must be premised on the previous tenure projection that we had made as Sars that the R30 billion is not the only time that the amount of money and the budget has been reviewed. “In 2008/09 and in particular 2009-2010 there was a deficit of R60 billion. So that was huge.”
Moyane said members of Parliament should take into account the actual revenue collected in 2009-2010 (R598 billion) and compare that with what had been collected under his stewardship from 2014-2015 (R986 billon) and 2017 (R1.07 trillion).
“In terms of actual tax rate to GDP ratio, we have surpassed the levels that were achieved in 2008-2009 and we believe we will maintain the same level of tax to GDP revenue,” he said.
Gordhan was the Sars commissioner from 1999 to 2009.
ANC MPs empathised. Dikeledi Mahlangu said she had heard “from the grapevine, the corridors and on social media platform, the National Treasury contributed to this tax revolt”. She asked for clarity.
Another ANC MP, Pinky Kekana, accused Treasury of “speaking in tongues on this R30 billion shortfall while records showed this has been happening for years”. Kekana said Treasury was treating Sars like “a prodigal child” and that “Sars is being attacked because it is led by a black person [Moyane] who is African. “Ever since he took over ... it is unfair!” protested Kekana.