SARS Quarterly Report (January 2016 – March 2016) - PowerPoint Presentation

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SARS Quarterly Report (January 2016 – March 2016)

Presentation to SCOF17 May 2016

SARS collected more than R 1 Trillion for the first time – R 1 069 983 Leverage our capabilities, collective resources and partnerships

Effective technology-enabled client-facing workforce

Automated Risk Engines and data matching across tax types

Synergy from Debt collection efforts

Partnerships

Meticulous Planning and Forecasting

Strong Leadership and Focus

Hands-on Management Approach

Special Initiatives

R 283 million more than target

SARS balanced the 3 levers to execute its mandate

Service

Enforcement

Education

Lower VAT refunds

- R4bn (9.6%) lower due to weak private sector capital investment driven by low confidence levels and weak demand.

Marginal

increases in

DT/STC

-

R0,3bn (5.2%) higher due to companies returning profits to shareholders through dividend declarations rather than reinvesting.

Higher than expected

CIT collections

-

R1.7bn (3.5%) higher than expected provisional payments from SSMEs. Indicative of improved corporate profits for this segment.

Revenue Collection Highlights

R309.5 bn

revenue collected for Q4, marginal surplus of R0.3bn against estimate

Overall

positive performance

Higher

Domestic

VAT

-

R0.4bn (0.5%) higher driven by solid growth in payments from SSMEs

Customs Duties

-

R0.3bn (1.8%) due to slightly higher vehicle imports, gains from exchange rate weakening, and hikes in specific duty rates

Detailed Revenue Collection

Operational Highlights

Served 1.4 m taxpayers through our branch network and Mobile Tax Units

Received

1.1 m calls

via national call centre,

94%

of queries were

resolved at first contact

Conducted

885 investigative audits

,

3468 compliance audits

and collected

R922.7m

Debt book was 9.01% of revenue in Q4 against 8% target, despite

R4. 75

bn

cash collected.

R15.11bn of the total debt book was collected by 31 March 2016 (R96bn)

Successfully processed

301 VDP applications

and collected R444m

Dealt with

2461 dispute cases

through the Alternative Dispute Resolution process

Quarterly Measure

Quarterly Measure

Quarterly Measure

Quarterly Measure

Quarterly Measure

Quarterly Measure

Progress on key initiativesTax

Compliance Status

Online TCS system piloted in December 2015

Second phase of system called “My Compliance Profile” launched during Q4

Old TCC system will continue to run until the new TCS gets fully implemented in April 2016

Client Information

System

(single registration)

Piloted a merge of Tax and Customs records of 100 taxpayers into consolidated entity

82% of selected taxpayers were merged successfully

Illicit Economy

25.9m illegal cigarettes worth R22.1m were seized (total for year equated to 134 million sticks)

15,892 clothing and textile items worth R2.9m were seized

2665kg of narcotics were seized to the value of R69.2m and illicit cash of R13.15m were

seized (total narcotics is R286million for the year and cash seizures for the year is more than R148 million)

Progress on key initiativesNew Customs

Act Program (NCAP)

SARS is preparing for implementation of the new act

Complaints

Management

System

System and process aligned to ensure all cases received for the OTO are ring-fenced

SARS changed branding and content of all systems generated letter and forms for the OTO

Preferred

Trader

Program (PTP)

Completed drafting of specific Excise audit and accounting training material to align them to new Excise audit processes and SOPs

Refined the internal preferred trader procedure manual for use by SACU member states to create aligned Preferred Trader Programs in terms of the SACU Mutual Recognition Annex

X-Ray Scanners

Mobile cargo scanner from Durban has been deployed to Beit Bridge and went live in February. Initiated the procurement process for an additional air cargo scanner, a mobile cargo scanner and 16 baggage scanners.

Assisted SACU member states to identify capacity building requirements and develop a work plan for implementation

Progress on APP Strategic MeasuresIncreases Customs Compliance

Customs Revenue Collected (Rbn)

60.2

59.3

Decline mainly due to a drop in Import VAT, specifically on vehicles and machinery

% of trade that has been audited with a view to obtain Preferred Trader Status

25

29.41

The increase in the volume of trade for potential preferred traders is an indication of improved compliance in Customs

% of cargo declarations targeted

11

12.34

The alert ratio is higher as a result of the increase in reference prices due to an increase in the rate of exchange

% increase in electronic manifest submission

n/a

n/a

Annual Measure

Interfront Governance – Unqualified Audit report

n/a

n/a

Annual Measure

Quarterly

Target

Measure

Quarterly

Achievement

Comment

Progress on APP Strategic MeasuresIncreases Tax Compliance

Total Tax Revenue Collected – excluding Customs (Rbn)

249.1

250.2

Over achievement was mainly due to higher than expected CIT collection, as a result of increased provisional payments and marginal increases in DT/STC and Customs duties

Debt book as a % of tax revenue

8

9.01

This increase is a result of new debt, which comes into the debt book at a higher rate than it is flowing out

% PIT filing compliance

92

92.16

Since the digitisation and pre-population of PIT returns, PIT compliance has improved

% audit coverage of registered taxpayers (PIT, CIT, VAT/Excise and PAYE)

11.5

15.12

Over-achievement was due to revenue drive initiatives

% in-depth audit coverage of registered taxpayers (PIT, CIT, VAT/Excise and PAYE)

0.075

0.104

Over-achievement was due to revenue drive initiatives

Quarterly

Target

Measure

Quarterly

Achievement

Comment

Progress on APP Strategic MeasuresIncreases Ease and Fairness of doing business with SARS

Quarterly

Target

% uptake in electronic filing, declaration and payment submissions for all tax products

98

98.52

The positive performance is a result of SARS digitisation efforts which make it easy and cost effective for taxpayers

% uptake in electronic customs bills/declarations (EDI)

99.99

99.99

The positive performance

is a result of

SARS digitisation efforts which make it easy and cost effective for taxpayers

Average processing time for PIT returns (working days)

30 minutes

1.78 days

(854 minutes)

89% was assessed in 5 seconds, however certain factors affects the average processing time negatively e.g. returns routed for audit,

45 875

more returns routed for

manual

assessment, and those awaiting supporting documents

Average processing time for CIT returns (working days)

< 1

0.42

Over achievement is due to systems enhancements where assessments are almost in real time

Average processing time for VAT refunds (working days)

21 days

36.59

Excluding outliers the average was 25.19 days, however under performance is a result of outlaying cases which include over payments, system generated internal journals and refunds linked to non-compliance

Measure

Quarterly

Achievement

Comment

% of VAT refunds processed within 14 days

74

59.6

Under performance is a result of increased cases of suspected fraud, therefore the process was enhanced with increased risk scrutiny resulting in VAT refund savings of > R 1.6 billion annually

Progress on APP Strategic MeasuresIncreased Cost Effectiveness , Internal Efficiency and

Institutional Respectability

Employee Engagement (%)

64.5

67.5

Annual Measure

Updated with results available subsequent to drafting the report

Leadership Effectiveness Index%)

n/a

n/a

Annual M

easure

TBA at end of May 2016

Employment Equity: Demographics (%)

72

74.55

Positive performance is as a result of improved representation of African employees

Employment Equity: Gender on Management (%)

47.2

48.5

Positive performance is as a result of improved representation of female employees

Employment Equity: Disability (%)

2.06

1.18

Under performance is as a result of attrition and low recruitment rate

Unqualified report by Auditor-General

n/a

n/a

Annual Measure

Quarterly

Target

Measure

Quarterly

Achievement

Comment

Treasury allocation to revenue percentage

n/a

n/a

Annual Measure

Budget vs. Expenditure

SARS had a surplus of R2.26bn at the end of Q4

Q 4

Revision of

personnel expenses

as a result of Treasury

grant reduction

Timing difference

in payment to suppliers

Underspent

on initiatives

as a result of reviews, late start to projects as well as several multi-year projects requiring approval from NT to roll over funds

Budget vs. Expenditure

Human Resources

SARS had total headcount of 14 198 employees at the end of Q4

Q 4

Overall increase

of 220 employees from April 2015 to March 2016

SARS recruited

189 new employees

and

lost 170 employees

through attrition during Q4

On track with regards to Employee Equity except for

disability target

Human ResourcesEquity

March 2016

Total

Actual

Annual Target

Black

10 585

74.55%

72.00%

Female (Grade 6-9)

1 969

48.50%

47.20%

Disabled

167

1.18%

2.06%

January

February

March

Growth YTD

Headcount

14 203

14 193

14 198

220

Headcount

growth

24

-10

5

African

Coloured

Indian

White

Total

March Headcount

8 197

(58%)

1 550 (11%)

894 (6%)

3 557 (25%)

14 198

Thank You