The South Africa Revenue Service (SARS) recently released its report on its successes and challenges over the past year.
The Congress of South African Trade Unions (Cosatu) is encouraged by SARS’ steady turnaround and congratulates its 14 500 employees on their outstanding achievements, including surpassing R2 trillion in revenue collections and especially in exceeding 2024’s tax collections by 8.4% or R155 billion in taxes owed to the state.
We are proud of these dedicated public servants, most of whom are members of COSATU’s affiliate, NEHAWU.
The remarkable turnaround of SARS from being at the epicentre of the state capture project and that was systematically decapacitated, to once again becoming a centre of public sector excellence and ramping up the fight against tax evasion and customs fraud; confirms the state’s invaluable role in society and the economy.
It shows that when the state is provided with competent leadership, fills frontline vacancies and recruits critical skills, removes corrupt and criminal elements, and invests in its capacity and infrastructure; that government will deliver upon its mandates and provide the quality services and infrastructure necessary for society and the economy to thrive.
An efficient and corruption free SARS is key to ensuring the state can fulfill its constitutional and developmental mandates.
The working class and the economy depend upon a state able to deliver quality education and healthcare, invest in critical infrastructure and stimulate inclusive economic growth, provide relief for the poor and the unemployed, amongst many other public services.
These require all South Africans, in particular the wealthy and businesses to pay their fair share.
The 8.4% improvement in tax collections validates COSATU’s campaign for SARS to be provided with the necessary support and resources to ramp up tax compliance and not to increase taxes upon the increasingly stressed and embattled working and middle classes, in particular VAT and income.
SARS’ consistent progress in improving tax compliance from 61% to 67% over the past few years under President Cyril Ramaphosa’s African National Congress led administrations and outgoing Commissioner, Edward Kieswetter’s leadership, has provided invaluable breathing space and additional resources for the state’s turnaround.
SARS must be tasked to raise tax compliance to 75% by 2029.
This will generate the funds desperately needed to capacitate the state to provide quality public and municipal services, stimulate badly needed economic growth and jobs, and provide relief for the poor and the working class, including reducing the increasingly suffocating tax burden upon low- and middle-income workers.
Ramping up tax collection has become more urgent given the global economic turmoil from the war in the Middle East and the record fuel price hikes that threaten to grind the economy to a halt.
This is critical as the necessary fuel levy relief provided to commuters for this month costs the state over R5 billion.
This relief will need to be extended as we wait for the war in the Middle East to end and oil and fuel prices to fall.
Improving tax compliance is crucial to enable government to reduce the tax burden upon low- and middle-income families who have over the past few years seen their taxes rise, in particular from two years of not adjusting income tax brackets for inflation and the overall cost of living rise, especially electricity and fuel prices.
A broader tax base will give the state space to reduce taxes upon the working and middle classes. Simultaneously this is becoming increasingly important with worrying trends of skilled professionals moving overseas in pursuit of better paying jobs.
Whilst applauding the tireless efforts of SARS’s employees and leadership, we remain deeply worried about the dangerous rise in illicit goods, in particular alcohol and tobacco, and also customs fraud, especially for clothing, tyres, fuel and vehicle components.
These threaten local jobs, businesses and value chains plus the sin tax regime needed to protect society from unhealthy products, and tax revenue needed to fund public services.
It is urgent that SARS be given further funding and support to ramp up its fight against illicit goods and rampant customs fraud. This is not a battle that workers and the economy can afford to lose.
This needs to include the deployment of scanners to ensure all imports at our ports of entry are inspected and pay their due duties. Organised Business should be engaged to contribute towards their procurement.
Efficient customs enforcement must be a non-negotiable as government correctly seeks to expand trade opportunities across the world and especially with China, India and Brazil.
SARS must be resourced to go door to door to ensure all businesses, including in the informal sectors, taxis, taverns etc. pay their taxes, including levies such as the Unemployment Insurance and Compensation of Occupational Injury Funds established to protect workers.
As government prepares for the Medium-Term Budget Policy Statement, allocating SARS additional resources is a must.
SARS needs to be enlisted to help government escalate and win the war against state capture and crime, including through lifestyle audits of high wealth individuals in the public and private sectors.
Cosatu thanks outgoing Commissioner Edward Kieswetter for his leadership during this particularly challenging time in SARS’ history. The Federation wishes him well and trusts that he will continue to avail his knowledge and experience with SARS and government.
We welcome the new Commissioner, Dr. Ngobani Makhubu and are confident that with his extensive experience at SARS, his tenure will see SARS continue to exceed its targets and ensure the state is able to collect the funds needed to provide quality public and municipal services to the working class, society and economy.
It will be important that SARS continue to work closely with labour and business in its efforts to crack down on tax and customs fraud and the illicit trade in goods that threatens local jobs, businesses and the state itself.
SARS was the engine of the successes of President Mandela and Mbeki’s administrations. It will equally determine the successes of President Ramaphosa’s efforts to renew the state and the nation.
Solly Phetoe is the General Secreatary of Cosatu.
Solly Phetoe is the general secretary of Cosatu.
Image: Doctor Ngcobo / Independent Newspapers.
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