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2023 Legal and Policy

Legal and Policy - 7 September 2023

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Legal and Policy

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SARS:

  • 6 September 2023 – We have a new annual Service Charter with effect from 1 September 2023. It has been adopted that SARS will review annually the service charter, mostly on committed service level metrics. In line with Strategic Objective 5 – “Increase the use of data to improve integrity, derive insight and improve outcomes”, we derived data insights on the lessons learnt that there are those metrics which over performed consistently in the financial year 2022/23 and a few that battled to even meet the expected service levels.

During the adoption of the service charter in 2022, we had informed external stakeholders that SARS will review some metrics upwards depending on improvement of efficiency and effectiveness. With the Commissioner’s approval, we have amplified some metrics to demonstrate that SARS lives by its promises. These changes were implemented from 1 July 2023 in the following categories, correspondences, registrations, returns, verifications, audit, refunds, payments, customs disputes, Voluntary Disclosure Programme (VDP) and Complaints Management Office (CMO).

It is a commitment to truly portray service obsession.

  • 5 September 2023 – Find below the keynote address by Mr Edward Kieswetter, Commissioner for the South African Revenue Service (SARS) and vice-chairperson of the African Tax Administration Forum (ATAF), on the occasion of the 2nd Network of Tax Organisations (NTO) technical conference under the theme “Digitalisation of Tax Administrations and contemporary issues” on 5 September 2023 in Cape Town.

I was very excited to learn that the theme for this conference would be on the digitalisation of tax administrations and contemporary issues. My sense though, is that as global tax leadership representatives we cannot talk amongst ourselves, as this is often akin to preaching to the converted. We have to engage the broader stakeholders in the tax eco-system be they:

  • Policy makers who must ensure that relevant and proactive development of tax legislation and policies appropriately remain relevant to a rapidly changing digital and virtual world, the proliferation of tax crime while securing the rights of taxpayers in a fair and equitable manner,
  • National Treasuries – who, if I listen to my colleagues at the OECD and Forum for Tax Administrations (FTA), from around the world – have not made adequate investment in the collection capability of Revenue Administrations. This is a rather unfortunate austerity approach that fails to see the strategic role Revenue Authorities play in the longer-term fiscal integrity and sovereignty of countries,
  • Political Principals and Senior Budget Administrators charged with the allocation of fiscal resources, to ensure a more effective funding allocation to revenue authorities that will in turn result in an exponential and positive return on investment,
  • Legal, Tax and Financial Professionals who often shape the advisory and intermediary landscape in a manner that erodes tax morality and compliance, and
  • The Media, to be more balanced in shaping the national narratives regarding fiscal responsibility and tax morality, whilst holding elected officials accountable for the delivery of social goods and services.

Whatever we may feel about tax, it is still the main source of revenue for governments around the world to finance social programmes and create enabling infrastructure that secures the material and emotional well-being of citizens. These programmes affect particularly the most vulnerable among us who cannot insure themselves from man-made or international disasters (such as we’ve seen during the COVID-19 Pandemic), and who cannot afford private goods or services, such as healthcare, education, housing, nutrition, etc. Poor people have no choice but to look to government for these services, and tax revenues makes this possible. I am therefore a strong advocate for broader stakeholder engagement with the important work of the NTO, hence I welcome the engagement with the media over the next few days.

The conference theme, digitalisation of tax administrations and contemporary issues, has evolved in an exponential and disruptive manner in the recent past. In many ways, COVID-19 has accelerated to need for rapid modernisation of our work.

When I joined SARS – for the second time – in 2019, it was at a challenging time. The organisation had become a victim of state capture. It had been repurposed to serve the corrupt intention of a self-serving leadership and their narrow interests. Governance and Integrity had deliberately been destroyed and well-established institutional arrangements were dismantled. Mission critical technology modernisation was disrupted. As a result, internal trust and morale between employees and leadership had eroded. Competent professionals left many organisations. Public trust dropped to well below 50%. Revenue performance and tax compliance declined significantly.

We were confronted with a clear mandate. To turn around SARS and this time rebuild it into a SMART Modern Tax Administration that could be trusted and admired. We had to restore institutional capability and integrity to deliver on its mandate, and improve overall performance. No sooner had we started, when we were confronted with the COVID-19 pandemic that brought its own set of devastating challenges. However, COVID-19 inadvertently took us to the drawing board to think from first principles, and very quickly accelerated our response towards reprioritising our technology investment to enable our employees to work during the hard lock-down and to allow taxpayers to continue to fulfil their tax obligations. We used the pandemic to our advantage and have enjoyed remarkable progress on our modernisation journey, but we still have much to do.

’SARS’ experience is not unique, this is evidenced in the OECD’s Tax Administration 2022 publication which “shows how the pandemic accelerated the shift to digital services with an almost 30% increase in digital taxpayer contacts in 2020. At the time of publishing of the report, digital channels were dominating interactions with taxpayers, with around 1.3 billion contacts via online taxpayer accounts, and more than 30 million contacts via chatbots. This is a rapid shift from the pre-pandemic models which may have depended on channels such as post or in-person visits to the tax office. These new channels are often employing behavioural insights which are becoming more widely used in all aspects of a tax administration’s work.”

I will share some of SARS’ experience during this conference.

Ladies and gentlemen,

The progress reported is impressive, but it would not have been possible in the absence of a common vision, clearly defined strategic objectives and measurable results. Most commentators agree that the most crucial elements to the digital transformation journey are:

  • Leadership in terms of the centrality of providing a clear digital transformation strategy, organisational culture, and change management for internal resistance;
  • Building digital skills and workforce agility;
  • Appropriate budget allocation and funding certainty;
  • IT security and dealing with the challenges posed by legacy issues; and
  • Lastly, to me personally, in the context of driving voluntary tax compliance – addressing the customer needs, expectations and meaningful service experiences.

I will deal with most of these elements over the next couple of days.

However, I want to pause here and focus on one element as a critical enabler of the digitalisation journey – and that relates to funding. Before state capture, SARS was a leader in digital modernisation for many years. However, partly due to financial constraints, but also a short-term approach, budgets were then frozen for a number of years and SARS fell behind in driving technological innovation. We have now managed to restore some additional funds to continue our modernisation, but we are still substantially underfunded to move at the necessary speed in an environment that is changing exponentially, business models are being disrupted, and tax crime proliferating at an alarming rate. I am sure many of you can report the same.

The challenge now is that we not only have to play catch-up after many years of under-investment, but we have to accelerate modernisation simply to remain relevant. We are at a point where we can again focus on innovation. The important lesson here is that the digitalisation journey is not a finite project, but a new way of being. It is an ongoing journey. Once you suspend funding, the end result will always be the suspension of innovation and regression against the progress of other administrations.

This goes against the intrinsic value of digitalisation in improving tax compliance and detecting tax non-compliance. As more financial transactions are taking place digitally, more 3rd party data sources are shared with tax administrations, and central bank digital currencies are emerging, the importance of digitalisation and consequently the use of data science, and artificial intelligence have become central to revenue collection, compliance and trade facilitation. So, in short, whenever budget cuts are required, National Treasuries – Budget Offices are advised to avoid across the board cuts and ensure a more prudent approach to invest to build enabling and productive economic capacity, create employment, and thus expand the tax base. This secures fiscal integrity and sovereignty in the long run. Tax Administrations should be excluded from across-the-board austerity measures. The investment in digitalisation should not be disrupted. The cost of recovery is simply too high in every respect.

Going digital through enabling technologies and increased reliance on data science and artificial intelligence has had global benefits worth reflecting on for a moment:

  • Making it easier for compliance. It takes you approx. 5 seconds to unlock your phone using facial recognition. Today, you are able to receive your tax assessment within 5 seconds or less at the click of a button (at SARS we issue 94% of assessments in 5 seconds and we auto-assess almost 4 million taxpayers. This involves the act of computing a multiplicity of data points and algorithms in a matter of seconds through the power of big data and enabling technologies (such as machine learning & artificial intelligence as well as cloud computing).
  • Exponential growths in the expanded and increased use of data – for example, Automatic Exchange of Information (AEOI) has doubled since its inception, from some 47 million accounts in 2018 with assets totalling of EUR5 trillion, compared to the recent exchange period that had 111 million accounts in 2021 with assets totalling EUR11 trillion.
  • Evident support for digital transformation – Tax Administration’s Investment into ICT (Information & Communication Technology) has doubled since 2018, representing only approx. 2% of Tax Administration budgets to now being 4% in 2020.

I wish to turn to what I believe is a matter for urgent attention. The question of a higher purpose and common objective for members of the NTO, which has just increased to 10 regional organisations representing the interests of its respective constituent tax administrations and/or revenue authorities. I frame this as my challenge to you.

In the context of digital transformation and modernisation journeys, a really transformative common purpose objective would be to leverage efforts towards a single digital identity. Countries like Chile, Sweden and Norway have used a single unique digital identity for the whole of government as well as subscription to the financial services. This has enabled them not only to serve citizens better, but also for more effective detection of tax and economic crime, and law enforcement. Generally, its proving to be a defining enabler towards improved delivery of social services and greater social cohesion. The achievement of a single digital identity is well beyond the scope of tax administration, but I believe we can lead the way given our dependence on it for more effective administration, though it will require strong political will and competent institutional leadership. The advocacy role, convincing, influencing, and global networking of the NTO, positions it well to set a single digital identity as a global and clear common objective for its members.

Heads of Tax and Revenue Authorities like myself have to challenge their leadership teams to think differently and to challenge conventional thinking. So, in this vein, I want to challenge all the members of the NTO to become vocal advocates and promoters of a single digital identity.

For more information, contact SarsMedia@sars.gov.za

In the 2023 Budget Speech, the Minister of Finance, Enoch Godongwana, announced a special tax relief measure to ease the impact of the electricity crisis on food manufacturers, effective 1 April 2023 to 31 March 2025.

Pursuant to our strategic objectives to provide you, as taxpayers and traders, with clarity and certainty and to make it easy for you to comply with your tax obligations, we are hereby inviting you to the webinar. The aim of the webinar will be to educate the food manufacturing industry on the legislative provisions governing this new diesel refund and what channels to follow when registering and how the refund claiming process will work.

As an important stakeholder, SARS hopes you will take advantage of the opportunity to keep abreast of important developments in this area. You may also extend the invitation to other interested parties.

Webinar details:

  • Theme: Diesel Refund for Foodstuff Manufacturers
  • Date: Thursday, 7 September 2023
  • Time: 17:00 – 19:00
  • Platforms: Virtual via Zoom and YouTube

Register in advance for this webinar on the following link: https://sars-gov-za.zoom.us/webinar/register/WN_xI60QKKVSSC02Ep11M89Xg

  • Meeting ID: 991 5774 1992
  • Passcode: 795176

After registering, you will receive a confirmation email with information on how to log into the webinar and have your questions answered during the session. The webinar will be recorded and published on the SARS TV YouTube channel.

YouTube: https://youtube.com/live/fycXtBKB7zc?feature=share

If you have questions about this new refund scheme, please send an email to Dieselfoodstuffs@sars.gov.za

  • 4 September 2023 – The tax workshop and mobile tax unit schedules for KwaZulu-Natal and North West provinces during September 2023 have been published.
  • 4 September 2023 – The Minister of Finance announced in the 2022 Budget on 23 February 2022 that excise duty on vaping tobacco products would be introduced. Nicotine and nicotine-substitute solutions in vaping products was included in the tax net with a flat excise duty rate of R2.90/ml from 1 June 2023.

The forms DA260 Excise Account for Tobacco Products in which the vaping products is accounted for excise duty purposes were also amended accordingly to insert the vaping products.

For more information, please see the Vaping Products webpage. On this webpage you will also find the frequently asked questions and the relevant forms if you need to apply and obtain license for the manufacturing premises with SARS.

  • 4 September 2023 – From 15 September 2023 SARS will be implementing a new system for APT wherein the APT201 returns will now be submitted via eFiling including the payment thereof.

With effect from 15 September 2023 taxpayers will be issued with new APT tax numbers which must be used to register the APT client on eFiling and activate the tax type. It must be noted however that submission of accounts via eFiling will initially only be open to those clients that make use the following banks:

  • Standard Bank
  • First National Bank
  • Nedbank
  • ABSA
  • Citi Bank

The rest of the banks will be migrated in due course and SARS will notify clients accordingly.

It is important to note that even if the APT client does not make use of the above banks they are still required to make use of eFiling to make payment. These clients will in the meantime continue to submit their APT201 returns via the email channel to the Customs and Excise APT Team at OR Tambo International Airport as per the below contact details, however it is important note that payment of these accounts must be made through eFiling,

The APT rates are:

  • Standard rate (International flights): R190
  • Lower rate (BLNS countries): R100

General queries regarding APT can be directed to:

For more information see the Air Passenger Tax webpage.

  • 4 September 2023 – RFP09/2023: Appointment of the service provider for the provision of electric forklifts for the period of five (5) years

The questions and answers document is now available.

  • 4 September 2023 – RFP29/2023: Appointment of a service provider for the provision of regulatory compliance management software tool

The Questions and answers no 2 document is now available.

  • 1 September 2023 – SARS is conducting a mid-year survey to measure your experience with Trade Facilitation Indicators (TFIs) that are administered by Customs and Excise Division. The survey is sent to a sample of selected enterprises. The survey runs from 6 – 20 September 2023. Click here for the letter to stakeholders.

To see if a survey from SARS is legitimate, see our Current surveys, emails and SMSs webpage.

  • 1 September 2023 – Update on RFP13/2023: Appointment of suppliers for supply and delivery of inverters, lithium-ion batteries and solar panels (Alternative energy equipment) for the period of three (3) years

The questions ans answers document is now available.

  • 1 September 2023 – Customs and Excise Act, 1964: The following draft amendments are proposed in Part 1 of Schedule No. 1:
  • Draft amendment to insert new 8-digit tariff in Chapter 5, to provide for Ivory of elephants and rhinoceros in Part 1 of Schedule No. 1, for Prohibitions & Restrictions purposes
  • Draft amendment to delete and to insert new 8-digit tariff in Chapter 12 to provide for re-classification of Rooibos
  • Draft amendment to insert new 8-digit tariff in Chapter 30 to provide for vaccines imported in bulk and those for retail purposes, in Part 1 of Schedule No. 1
  • Draft amendment to Chapter 72 to insert new 8-digit tariff subheadings to provide for new ranges in thickness, in Part 1 of Schedule No. 1
  • Draft notice in Chapter 41 to amend the description of tariff heading 41.07
  • Draft amendment to Chapter 94 to provide for the different furniture, in Part 1 of Schedule No.1

Due date for comment: 10 October 2023

  • 1 September 2023 –The Advance Import Payment (AIP) Notification as part of the Advance Payment Notification (APN) project is one of SARS’ Customs Modernisation Programmes which involves a collaboration between SARS, the South African Reserve Bank (SARB) and authorised dealers in foreign exchange and aimed at combatting illicit financial flows and customs valuation fraud associated with the misuse of advance foreign exchange payments in respect of goods that are to be imported.

Advance payment notifications make it easy for taxpayers and traders to comply with their tax obligations whilst assisting SARS to detect and make non-compliance hard and costly for those traders and taxpayers who do not comply. The APN process ensures that traders notify SARS of their intention to apply to an authorised dealer for an advance foreign exchange payment for imported goods. This further prevents underpayment of customs duties and taxes, valuation fraud and illicit financial flows related to the importation or non-importation of goods following advance foreign exchange payments.

With effect from the 3rd of December 2021, in terms of the published Rules under sections 59A and 120 of the Customs and Excise Act 91 of 1964 for Advance foreign exchange payments, importers have an obligation to notify SARS via eFiling of their intention to apply to an authorised dealer for an advance foreign exchange payment in respect of goods to be imported. See the Advance Import Payments webpage here for more detail.

  • 1 September 2023 – Achieving our Vision 2024 of a smart, modern SARS with unquestionable integrity that is trusted and admired is of paramount importance. Pivotal to the delivery of our vision are our digital platforms & technology infrastructure. In order to provide clarity & certainty, make it easy for taxpayers & traders to comply with their obligations and building public trust and confidence, our technology assets have to demonstrate the highest levels of availability, robustness and security.

Pursuant to our Vision and Strategic Objectives, which include modernising our systems to provide Digital and Streamlined online services, we are hard at work ensuring that our digital platforms & technology infrastructure are available, robust & secure, by performing regular upgrades, enhancements, and maintenance.

In light of the above, SARS Digital platform upgrades are scheduled for Saturday 2 September 2023 from 22:00 to Sunday 3 September 2023 at 04:00.

During this time, you may experience intermittent service interruption on our eFiling Platform.

Customs Digital Platform will not be available during this time.

Responses (CUSRES messages) to transactions submitted during this time will be delayed, however arrival and exit management functions are available at land border posts for all released declarations and manifests.

Stakeholders are therefore urged to submit priority Goods Declarations (bills of entry) and Road Manifest by Saturday, 2 September 2023 @ 21:00.

The updated drawings and answers to questions from bidders are now available.

  • 31 August 2023 – South Africa recorded a preliminary trade balance surplus of R16.0 billion in July 2023 attributable to exports of R174.0 billion and imports of R158.0 billion.

See the Media Release here or visit the Trade Statistics webpage.

  • 31 August 2023 – Tender bids received

The updated tender bids received document is now available.

  • The new link to the definitions, acronyms and abbreviations; and
  • The disclaimer paragraph.

NATIONAL TREASURY:

ATAF:

AuthorSAICA
DivisionTax
Keywords
SARS
OECD
National Treasury
TAX OMBUD
Date7 September 2023