Why SARS should have an ‘intrusive’ unit

Finance minister Tito Mboweni supports the idea of an ‘intrusive’ investigating unit at SARS so that it may act as a well-functioning revenue-collection authority.

Responding in a recent parliamentary Q&A session, Mboweni said that SARS must have significant intrusive powers, not only to deal with taxpayers concealing information on income received, but also to counter illegitimate trades (and financial flows) in commodities such as tobacco, liquor and counterfeit goods.

He added that SARS is a semi-autonomous revenue authority which determines its own internal organisation.

This means that the SARS commissioner, and not the minister of finance or any official at National Treasury, who can provide any information on any unit within SARS.

Citing the National Treasury’s submission to the Nugent Commission, Mboweni said that ‘enforcement powers that are also intrusive are necessary for any tax collection agency’.

“Whilst most taxpayers seek to comply, there are cases of taxpayers who are less cooperative when declaring income or have a clear incentive to withhold key facts about the nature of income-generating activities of the person or business.

“In such cases it is necessary for SARS to have intrusive enforcement capacity to deal with such evasion,” Treasury said.

Mboweni added that the  Nugent Commission has noted that any such unit is not unlawful and that SARS must not be ‘a toothless tiger’ when dealing with tax evasion and illegitimate trades and financial flows.

Read: Massive tax hike needed to fund South Africa’s NHI: economists

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Why SARS should have an ‘intrusive’ unit