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Speaker 1: Information today that SARS has finally broken the two trillion

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Speaker 1: round barrier, able to get just over two trillion ten

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Speaker 1: billion round for the financial year that ended last night.

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Speaker 1: Edward kiss Vegters, the commissioner at SARS A commissioner, good

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Speaker 1: evening to you and thank you for your time and

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Speaker 1: congratulations on your figures. You say, one of the reasons

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Speaker 1: that's happened is that there's been better compliance and I

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Speaker 1: presume more people are paying more of the tax that

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Speaker 1: they owe. It's such an important issue. What has changed

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Speaker 1: over the last year. What have you been able to

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Speaker 1: do to make that happen?

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Speaker 2: Stephen? Thank you. It's not what happened in the last year.

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Speaker 2: It's the compounding effect of the years, the seven years

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Speaker 2: of work that has consistently looked at broadening the tax

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Speaker 2: post to ensure that everyone who should be registered or registered,

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Speaker 2: that those who should file in fact file and file

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Speaker 2: that it turns on time. We have had many abuses

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Speaker 2: where people filed returns but don't pay the payments. So

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Speaker 2: it is the meticulous follow up of every of these

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Speaker 2: outstanding actions that have ensured that currently our registration compliance

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Speaker 2: is almost ninety percent and very pleasingly payment compliance is

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Speaker 2: now approaching seventy five percent. These were all in the

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Speaker 2: late fifties or early sixties when we started. Overall compliance

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Speaker 2: has now crusted seventy percent. So if a tax payer,

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Speaker 2: for example, is non compliant in year one and we

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Speaker 2: are able to change their behavior and make sure the

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Speaker 2: behavior stays changed, there is an endowment effect on compliance.

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Speaker 2: And that's an important acknowledgment is that SARS is not

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Speaker 2: a set of transactions that are built an institutional system

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Speaker 2: of improved, more efficient, and more effective tax administration. And

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Speaker 2: that's what you're seeing today, even and in an economy

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Speaker 2: that is fairly sluggish. One has to ask the question,

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Speaker 2: how is SARS able to collect a year on year

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Speaker 2: tax growth of eight point four percent when economic conditions

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Speaker 2: are just under five percent. It is that compounding effect

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Speaker 2: of building institutional integrity.

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Speaker 1: Does that lead to more disputes? Has the rate of

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Speaker 1: disputes gone up as a result? If you come knocking

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Speaker 1: on more doors for tax you know, does that lead

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Speaker 1: to a few more arguments?

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Speaker 2: I think we there are. There are a number of

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Speaker 2: reasons why taxpayers may dispute. It may start at the

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Speaker 2: most abusive end. Very often taxpayers just will kick the

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Speaker 2: can down the road, and they will dispute, object or

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Speaker 2: repeal just to buy time and to try their luck

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Speaker 2: to much chance. And in many cases those disputes can

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Speaker 2: go on for years until eventually it becomes almost uneconomical,

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Speaker 2: or they aren't out of business, or they disappear off

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Speaker 2: the face of the earth, which has also meant that

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Speaker 2: our debt book has grown significantly. We've seen in the

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Speaker 2: last year that our debtbook growth has seen a significant

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Speaker 2: shift to more complex debt that taxpayers are not able

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Speaker 2: to pay. So that for the first reason, secondly, there's

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Speaker 2: a genuine financial distress out there, so taxpayers don't necessarily

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Speaker 2: dispute the assessment, they just don't have the money. We've

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Speaker 2: seen a significant increase in deferred payment arrangements and then

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Speaker 2: taxpayers default on that. We have seen increasingly an application

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Speaker 2: for debt compromises, so that also means we need more

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Speaker 2: technical skills legal debt collections to follow that up and

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Speaker 2: to enter into the engagement with sars use all those disputes.

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Speaker 2: So it's a milliard of reasons that has seen the

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Speaker 2: and then of course sometimes we do get it drung.

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Speaker 2: And I'm pleased to say that in individual taxes. Our

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Speaker 2: auto assessment of six million people with a more than

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Speaker 2: ninety eight almost ninety nine percent acceptance rate suggests that

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Speaker 2: the deployment of technology and AI and data science has

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Speaker 2: helped us to decrease that margin of error to around

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Speaker 2: about one percent, and hopefully that will be able to

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Speaker 2: be leveraged across the other tax types as well.

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Speaker 1: You aren't finished with the technology. There's a new modernization

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Speaker 1: program I think you called it modernization three point zero.

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Speaker 1: There'll be a unique digital identity for a taxpayer. How's

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Speaker 1: that different to the situation now? Normally? Now, if you

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Speaker 1: go onto E filing, for example, you will be put

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Speaker 1: your name or use the name you'll put in your password.

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Speaker 1: Then they'll be which has become quite a standard thing.

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Speaker 1: The SMS you need to put in the SMS code

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Speaker 1: that sent you need to go from there. How's this

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Speaker 1: new thing going to be different?

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Speaker 2: You know, Stephen, one of the most frustrating even I

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Speaker 2: forget my tax password every year because you're only engaged

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Speaker 2: with stars. You know, many taxpayers once a year, provisional

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Speaker 2: taxpayer you know, maybe a few times more year. So

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Speaker 2: we have had to deal with taxpayers just forgetting their

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Speaker 2: username in passwords. We've built now at least a platform,

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Speaker 2: whether it's What's app or even a what we call

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Speaker 2: a dumb phone if you don't have a smartphone or

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Speaker 2: a mobile device, where you can go through a self

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Speaker 2: help system so that you can get your your your password.

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Speaker 2: The passwords are really old school. People forget their passwords,

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Speaker 2: they compromise their passwords, and we find many many taxpayers

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Speaker 2: being scammed, and so increasingly the world is moving towards

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Speaker 2: biometric authentication, which we have begun to now deploy in

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Speaker 2: the last fifteen eighteen months. Then we have two factor

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Speaker 2: authentication that goes with that, which means that you know

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Speaker 2: you'll use biometrics to be recognized once you are in.

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Speaker 2: There may be certain high risk, high risk transactions when

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Speaker 2: it involves especially refunds or banking details, we may introduce

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Speaker 2: a second layer world what to call two factor authentication,

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Speaker 2: where we send you a one time pin. But increasingly

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Speaker 2: we want to work towards biometric authentication. Secondly, we also

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Speaker 2: find that for about sixty two million individuals in South Africa,

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Speaker 2: we have about seven to eight digital identities for every individual,

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Speaker 2: which creates the opportunity for arbitrage. Stephen hurtis maybe have

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Speaker 2: an ID number, may have a tax number for his income.

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Speaker 2: He may have that number. If he's a director. If

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Speaker 2: he goes to baraguanev Hospital, he's got a hospital number.

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Speaker 2: And so you can end up with a number of

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Speaker 2: different identities which allows for arbitrage and client A unique

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Speaker 2: digital identity is the whole of government endeavor. Where we

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Speaker 2: have a population register which is the only identity of you,

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Speaker 2: we turn that from the current identities that we have

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Speaker 2: into a unique digital identity that will identify you across

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Speaker 2: the level of government. There's no need therefore, in the

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Speaker 2: future for SARS to give you, for home affairs to

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Speaker 2: give you an ID number, and for Salas to give

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Speaker 2: you a tax number. You'll be known across the system

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Speaker 2: of government with one. So that's the power of the uniquefier,

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Speaker 2: together with the biometric and two factor edification, will strengthen

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Speaker 2: the system and eliminate or at least reduce the risk

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Speaker 2: of fraud.

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Speaker 1: Commission and mister Commissioner, I really appreciate the time you've

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Speaker 1: always made yourself very available for us, So thank you

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Speaker 1: very much indeed, and I hope we can still speak

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Speaker 1: to you in the near future. The outgoing commissioner at SARS,

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Speaker 1: Edward kissvetter a reporting back on their tax take to

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Speaker 1: now