1. SARS Quarterly Report (January 2016 – March 2016)
Presentation to SCOF
17 May 2016

2. SARS collected more than R 1 Trillion for the first time – R 1 069 983
R 283 million more than target
Meticulous Planning and Forecasting
Strong Leadership and Focus
Hands-on Management Approach
Special Initiatives
Leverage our capabilities, collective resources and partnerships
Effective technology-enabled client-facing workforce
Synergy from Debt collection efforts
Automated Risk Engines and data matching across tax types
Partnerships

3. SARS balanced the 3 levers to execute its mandate
Service
Education
Enforcement

4. Revenue Collection Highlights
R309.5 bn revenue collected for Q4, marginal surplus of R0.3bn against estimate
Overall positive performance
Higher than expected CIT collections - R1.7bn (3.5%) higher than expected provisional payments from SSMEs. Indicative of improved corporate profits for this segment.
Marginal increases in DT/STC - R0,3bn (5.2%) higher due to companies returning profits to shareholders through dividend declarations rather than reinvesting.
Lower VAT refunds - R4bn (9.6%) lower due to weak private sector capital investment driven by low confidence levels and weak demand.
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

5. Detailed Revenue Collection

6. 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
Successfully processed 301 VDP applications and collected R444m
Quarterly Measure
Quarterly Measure
Quarterly Measure
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)
Dealt with 2461 dispute cases through the Alternative Dispute Resolution process
Quarterly Measure
Quarterly Measure
Quarterly Measure

7. Progress on key initiatives
Tax
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)

8. Progress on key initiatives
New Customs
Act Program (NCAP)
SARS is preparing for implementation of the new act
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.
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
Assisted SACU member states to identify capacity building requirements and develop a work plan for implementation

9. Progress on APP Strategic Measures
Increases Customs Compliance
Measure
Quarterly
Target
Quarterly
Achievement
Comment
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

10. Progress on APP Strategic Measures
Increases Tax Compliance
Measure
Quarterly
Target
Quarterly
Achievement
Comment
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

11. Progress on APP Strategic Measures
Increases Ease and Fairness of doing business with SARS
Measure
Quarterly
Target
Quarterly
Achievement
Comment
% 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, 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 days, however under performance is a result of outlaying cases which include over payments, system generated internal journals and refunds linked to non-compliance
% 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

12. Progress on APP Strategic Measures
Increased Cost Effectiveness , Internal Efficiency and
Institutional Respectability
Measure
Quarterly
Target
Quarterly
Achievement
Comment
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 Measure
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
Treasury allocation to revenue percentage
n/a
n/a
Annual Measure
Unqualified report by Auditor-General
n/a
n/a
Annual Measure

13. Q 4 R2.26bn at the end of Q4 Budget vs. Expenditure SARS had a
Revision of personnel expenses as a result of Treasury grant reduction
SARS had a
surplus of
R2.26bn at the end of Q4
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

14. Budget vs. Expenditure

15. Q 4 14 198 employees at the end of Q4 Human Resources
Overall increase of 220 employees from April 2015 to March 2016
SARS had total headcount of
employees at the end of Q4
SARS recruited 189 new employees and lost 170 employees through attrition during Q4
On track with regards to Employee Equity except for disability target

16. Human Resources 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
Equity
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%

17. Thank You