Treasury's head of tax says there's governance issues at Sars

Treasury deputy director general Ismail Momoniat says there are definitely governance issues at the revenue service.

CAPE TOWN - Treasury's head of tax Ismail Momoniat says there's no doubt that there's been corruption at the South African Revenue Service (Sars) and it's affecting tax morality.

He says if government fails to act quick enough on corruption at a public institution like this, taxpayers will continue to be less inclined to pay their dues.

Momoniat addressed a joint meeting of Parliament's finance committees on Friday.

He says an increase in the value-added tax (VAT) rate is preferable to raising personal income taxes to meet the state's rising debt costs.

Momoniat says there are definitely governance issues at the revenue service.

“It’s not true that it’s only because of the economic cycle that Sars has collected less. There are administration challenges.”

He says corruption at Sars cannot continually be covered up by legislative confidentiality clauses.

“When government is not fighting corruption or dealing with wasteful expenditure, it affects tax morality.”

Momoniat says labour legislation is protecting crooked public servants and it's affecting investor confidence.

In his State of the Nation Address last week, President Cyril Ramaphosa announced a commission of inquiry into Sars.

(Edited by Shimoney Regter)