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SARS a Beacon of Good Governance, Efficiency

09 October 2013   (0 Comments)
Posted by: Author: Lindo Xulu
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Author: Lindo Xulu (Businessday)

The South African Revenue Service (SARS) has its share of critics, but the figures show that it remains one of the government’s shining examples of good governance.

The tax authority’s 2012-13 annual report, presented to Parliament’s standing committee on finance recently, shows that operationally the institution remains at the top of its game.

This is despite the controversy over the departure in July of the commissioner, Oupa Magashule, for lying about offering a job to a friend of drug dealer Timmie Marimuthu.

Over the past six years, SARS’s cost-to-revenue collection ratio (calculated by dividing the cost of running the operations by the total tax revenue) has remained impressively near the international standards of 1%.

In its past financial year, its ratio came in at 1.07%, as it collected R814bn in tax revenue while keeping its operating costs at roughly R8.71bn.

This ratio has its limitations, however, as it does not take into account that SARS collects revenue on behalf of other institutions, including the Road Accident Fund.

Still, over the past few years, this ratio has largely remained within a band of 1% to 1.2%.

Altogether 14,700 people work for the revenue-collecting body, attracted by competitive salaries as well as a sense of national duty.Last year, Mr Magashule earned R4.2m, which included an R800,000 bonus — a 4.5% increase on the previous year. However, he got no golden handshake when he left.

Ivan Pillay, the deputy commissioner now acting as CEO, earned R2.8m. Advertisements are now out to fill the position permanently.

SARS spokesman Adrian Lackay says: "While we can’t always match what the private sector pays, we do offer competitive salaries. The only difference is that here we tend to attract people who are driven by a higher purpose.

"Working at SARS gives people the opportunity to make a real difference and to contribute towards building the country.”

Heart-warming sentiment aside, the tax authority also revealed a retention strategy, which includes a "flexible salary-package scheme” which, in theory, makes it possible for staff to structure their own pay. That has also helped the organisation to retain a large pool of its talent.

This, coupled with the decision to introduce its modernisation programme in 2007 to simplify tax returns and systems through automation, has also prevented the tax authority from having a bloated workforce.

Mr Lackay says this helped reduce the need for SARS to "acquire new staff on a large scale”.

"Without the benefits of the modernisation programme, it is estimated that the SARS staff component may have grown to about 30,000 by now,” he says.

This article was first published in the Sunday Times : Business Times


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