Judge Davis: I am committed to SARS’ success

Dear Sir,

Your article “SARS at risk of imploding” (March 5 2017) refers. In the article, a speech I delivered on base erosion and profit shifting was described.

I understand the difficulty of summarising a 40-minute speech, particularly when no written copy is distributed, but, unfortunately, the report needs some correction.

The way I approached the question of the integrity of the SA Revenue Service (SARS) was to say that the continuing focus on SARS in the public domain has raised perceptions that can only harm this critical institution.

I am extremely concerned with negative press coverage of SARS; hence, the problem of perception.

The Davis Tax Committee is not in a position to make any substantive assessment on the merits of this unfortunate coverage.

I certainly did not suggest that SARS was not staffed with a number of highly talented personnel – on the contrary.

However, the problem is that in dealing with multinational corporations, considerable resources are needed and it is my view that SARS needs further support to curb base erosion and profit shifting, an assertion that holds true for revenue authorities around the world.

On numerous occasions, I have stated that I gather SARS is strengthening its transfer pricing unit and that is to its great credit.

Similarly, it is not SARS that creates the deterrent for tax evaders to participate in an amnesty, but, as I emphasised, there is a need for the National Prosecuting Authority to be skilled to deal with complex tax evasion in order to prosecute offenders.

I have continued to say that I have little doubt that SARS on its side will ensure the success of the new Voluntary Disclosure Programme.

Finally, I regret that your correspondent did not realise that a reference to high-net-worth individuals at the Johannesburg Bar was said in jest!

As to the collection figures, I did question whether a downturn in the economy can explain completely the reduction in tax collection, but never suggested that the fault lies with SARS.

Indeed, it is my view that there is a need to wait until the end of the month when final figures are announced before making any final judgement in this regard.

I and the tax committee are deeply committed to ensuring with SARS that tax collection and administration continue to be world class – hence the need for me to clarify your report.

Yours sincerely

Dennis Davis

Chairperson: Davis Tax Committee