Building sustainable capacity in tax administration to mobilize domestic revenues Oupa Magashula 15 April 2011 World Bank Panel Discussion

SARS Compliance Model 1 Enforcement Service Environmental Knowledge and Understanding Risk Assessment Customer Awareness Effective Segmentation Education

Balancing voluntary compliance 2 Make it very hard for those trying to avoid paying their fair share Make it as easy as possible for those trying to comply Improve service and enforcement

Transformation: Key building blocks 3 From Stamping to Thinking Process-based Concentrate, standardise and streamline Risk focused Taxpayer Service Technology Taxpayer Education EnforcementTeam

SARS’s transformation journey 4 Process modeled & team based organisation IT enabled, process and market segmented organisation SIYAKHA 1 SIYAKHA 2 Pre-SIYAKHA Efficiency Gains 50% 40% 30% 20% 10% 0% Phases over time

Foundations of SARS’s DRM 5 Political will & support Existing legal framework Functioning institutions Market & segments knowledge Stakeholder involvement Change management Manage donor support & advise Measurement of success

SARS modernisation towards more efficient DRM 6 Educating & servicing the taxpayer Building fiscal citizenship Educate citizens on the importance of their tax contribution Greater risk management Shift from ineffectual gate keeping to focused risk management approach to compliance Increasing access to 3 rd party data Knowing the taxpayer Move from transactional to economic view of the SARS taxpayers & traders Result in greater detection of inaccuracies in declarations & providing a more appropriate service

ATAF Strategy 7 Strengthen African Tax Administrations Enhance professionalism Innovate, develop, share & implement best practices Combat tax evasion & avoidance Improve good governance & accountability Ensure greater synergy & cooperation in capacity development Mechanism for African perspectives on tax issues to inform & influence global dialogue

ATAF Work Programme 8 Research To develop an African perspective on tax issues, and provide guidance to ATAF members for reform processes. Needs Assessment Diagnostic Tool Facilitation of Reforms Projects – EOI and Transfer Pricing Capacity Development Programme Development of African Tax Centre Technical events EOI TP TPS Peer learning E-Resource Centre is the first step towards the establishment of an African Tax Centre as the hub of all ATAF and tax- related information.

Harmonizing tax policy to boost revenue in Africa 9 Tax competition – use of mail box companies Corporate collusion – “importation” of bank losses Corporate Russian roulette & risk taking – sovereign debt crisis Treaty hopping and shopping & special dispensations Mandate → to collect fair share of taxes “The journey towards harmonization of tax policy and rates has begun.” Collaboration in tax avoidance investigations

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