/ 10 February 2012

SARS on the receiving end

The South African Revenue Service (SARS) was recently recognised with four Public Sector Excellence awards recognising its all-round excellence in serving South Africans during the past year.

The awards are based on feedback from citizens and celebrate excellence in the public sector based on the Public Sector Excellence Reputation Index results. But despite this recognition, SARS deputy commissioner Ivan Pillay cautions against arrogance. “We have to remember that these awards deal with the perceptions of people and that our acknowledgment is relative to other institutions in the sector. In many ways, they show our 15 000 staff members that they are making a valuable contribution. But we must position ourselves within the South African context and learn continuously from what is happening around us,” he says.

For Pillay, one of the reasons why SARS was recognised is that it communicates very well internally and externally. Its communications flows from how the organisations operates and avoids media spinning at all costs, as Pillay believes “it catches up with you in some way or another”.

Going the extra mile
“Additionally, SARS prides itself in its sensitivity to the people who have complaints. While we believe that in general we do things right, there are times when we receive phone calls [from] people complaining or read a letter to the editor in the newspaper with a valid complaint,” says Pillay. To this end, he says, SARS is determined to go the extra mile. He feels that although SARS is a government institution and gets paid by government, it ultimately services the tax payer. And awards such as these are very important for a number of reasons.

Pillay feels that companies will always have a debate about whether it is salaries, wages and bonuses that motivate staff. For SARS, the acknowledgement by the public is vitally important as it provides a wonderful incentive for its employees to do even better. “Our employees continue to provide us with commitment and dedication. It is not easy to stay on the right path under quite difficult circumstances. We have to keep everybody aligned and rise above the diversions and distractions that are ever present,” says Pillay.

Death and taxes
Pillay agrees that the Public Sector Excellence awards certainly show that people’s perceptions around the ‘tax man’ are changing. The acknowledgement SARS is receiving proves that its compliance model is paying dividends. He says that this model consists of three levers that need to be pulled to improve compliance: education, service and enforcement. People need education to understand why taxes are required and where the money goes. On a service level, SARS is committed to making it as easy as possible for people to interact with the systems and make payment.

Finally, enforcement needs to be credible. With enforcement, the intention is not to punish an individual but to demonstrate to others that such enforcement exists. “This model is very useful, as there is this constant need for balance. For example, we need to balance our enforcement stance against the fact that [—]taxes [are] a grudge payment. We just want to make it as easy as possible for people to comply,” he says.

On the technology side
SARS is known for its use of technology to make the tax process as smooth as possible for its customers. However, Pillay says that it is only the past four or five years that SARS has really begun applying some of the technology that most people get excited about. He says that the department started building its capabilities by improving its processes. After all, he says, technology in itself is not a silver bullet. “Any organisation needs to have the processes and systems in place before it can start thinking about the technology. In the early years, SARS did not want to rush the technological change. Our first stage focused on improving our processes and fixing our management systems,” says Pillay.

According to Pillay, the technology rollout was conducted using a weighted model to ensure that all the basic elements were covered first. This has seen the system evolve to such an extent that almost 85% of actions from users do not require any manual interventions but instead filter straight through the system.

The bad and the good
But Pillay readily admits that SARS is not without its challenges. “We are part of a value chain. We collect the tax and [they] are deployed elsewhere. But the way taxes are deployed have an impact on the value chain as a whole. In South Africa, we have a relatively small tax base which we need to grow overall by growing the economy,” he says. One of the biggest challenges SARS faces is economic growth. This is not helped by the current global financial crisis. He also says that South Africa has its own challenges that make it unique from other countries.

Pillay says that the legacy of apartheid has done considerable damage to the psyche of the country and it is a challenge that is faced by every South African. But of all the challenges faced and the positive things SARS has done, Pillay is the most proud of the department’s stability. “SARS has very good macro-stability in the sense that both Trevor Manuel and Pravin Gordhan were involved with the organisation for a long time. Stability is what is needed so that we can afford to make mistakes and get better at things. Many other government departments have not had this good fortune,” he says.

This stability has also enabled SARS to push the self-service message. It wants to get as many processes and technologies in place to let people manage their taxes themselves. “We want a situation where a customer has one reference number, so that he or she would not have to do different things with government in parallel to SARS. Imagine this number linking across all government departments and integrating all your business under one umbrella,” he adds. Pillay admits that SARS still has a long way to go and is succeeding better with individuals than with businesses. However, by striving to decrease the cost of compliance, he is confident that even in the corporate sector, inroads will be made.

This article originally appeared in the Mail & Guardian newspaper as an advertorial supplement