POLITICS

No Fears Of A Tax Revolt -- Gordhan

If Sars doesn't collect enough tax a whole number of economic programmes are endangered, the minister of finance says.

26/03/2017 18:58 SAST | Updated 27/03/2017 15:15 SAST
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There are no fears in government of a tax revolt, Finance Minister Pravin Gordhan says.

He says he is "keeping a close eye" on the South African Revenue Service (Sars) to ensure the institution delivers on its mandate and it retains the confidence of South Africans.

Sars has been in the firing line after it emerged that government will have a R30-billion shortfall in the coming year. Last week National Treasury authorised an investigation by the tax ombudsman into the late payments of tax refunds, while it has also expressed concern at the levels of tax morality.

Lessons from elsewhere in the world show if the citizenry loses respect for the revenue service then you lose tax compliance. I don't think we're anywhere near a tax revolt or anythingPravin Gordhan

"Lessons from elsewhere in the world show if the citizenry loses respect for the revenue service then you lose tax compliance. I don't think we're anywhere near a tax revolt or anything, but while we have that (respect for the revenue service) we must behave in a professional way and act in the national and in the public's interest," Gordhan told Huffington Post South Africa in an interview.

"We must do the right things. Hopefully we will get the cooperation we require," the minister, who has been in running conflict with Sars commissioner Tom Moyane, added. Gordhan previously indicated he could not vouch for the accuracy of information provided by Sars to Parliament "due to the lack of cooperation" from the taxman's leadership.

Gordhan says Sars staff – they've experienced the loss of more than 55 senior managers up until 31 January and seen the closing down of a number of internal tax enforcement and compliance units – must be protected.

I know the 12 000, 13 000 staff that work there are highly committed people, I have worked with them for many years and they have always provided excellent service. Their motivation to provide a high level of service must not be tampered with in any way.Gordhan

"I know the 12 000, 13 000 staff that work there are highly committed people, I have worked with them for many years and they have always provided excellent service. Their motivation to provide a high level of service must not be tampered with in any way. In fact, it must be enhanced because it is their levels of service which gave Sars its reputation and earned them the respect of the South African public," he said.

Gordhan reiterated the importance of Sars in the country's democratic architecture and said proper and efficient revenue collection ensures fiscal sovereignty.

"If you are able to raise 90 per cent, 95 per cent of resources within your country from your own tax base it gives you a lot of latitude in policy terms. If you become too indebted to international financial institutions you have to follow their dictates, which you might not want to do," Gordhan said.

A dysfunctional revenue service on the other hand poses serious risks.

We pay social grants to 17 million beneficiaries which takes up around R150-billion, more than 10% of our expenditure. If that is not collected on the revenue side we are risking support to our poor.Gordhan

"For example: we pay social grants to 17 million beneficiaries which takes up around R150-billion, more than 10 per cent of our expenditure. If that is not collected on the revenue side we are risking support to our poor.

"But we also risk spend on housing programmes, land, infrastructure, economic programmes like agri-parks, industrial development zones and support for the motor industry. If revenue collection doesn't work, we endanger all those things," Gordhan added.

He said on Friday there has been no intervention by President Jacob Zuma in his and Moyane's relationship, as requested by the latter. "There's no need for anybody to intervene. Mr. Moyane is the accounting officer and he's responsible to the minister."