Informal Summary of the South African Revenue Service Bill

The South African Revenue Service Bill was tabled in Parliament in 1997. In view of the length of the document I did not attempt to convert it into an HTML document at the time but rather summarized the sections and highlighted certain interesting aspects. Obviously this summary may contain errors and omissions despite my best efforts and the original source document must be consulted before any firm opinions are formed or decisions are reached. Sentences and phrases in quotation marks are direct quotations from the Bill. Emphasis in italics is my emphasis unless otherwise noted.

South African Revenue Service Bill
Summary by Section

Part 1: South African Revenue Service

1. Definitions

2. Establishment

"The South African Revenue Service is hereby established as an organ of state within the public administration, but as an institution outside the public service."

3. Objective.

"SARS's objective is the efficient and effective collection of revenue."

4. Functions

SARS must secure the efficient, effective, and widest possible enforcement of the legislation listed in Schedule 1 and any other revenue collection legislation assigned to SARS in terms of legislation or by agreement with the beneficiary.

"(2) SARS must perform its functions in the most cost efficient and effective manner and in accordance with the values and principles mentioned in section 195 of the Constitution.

(3)SARS performs its functions-
(a) under the policy control of the Minister; and
(b) subject to any directives and guidelines on policy matters issued by the Minister."

5. Powers

SARS is assigned various powers in the first subsection to this section. These include the power to determine its own staff establishment and appoint employees and to acquire or dispose of any right in or to movable or immovable property.

"(2) When exercising its powers SARS must comply with any conditions imposed by the Minister in a directive issued under section 4(3). This may include a requirement that any specific power, including the power to borrow money, may be exercised only with the prior approval of the Minister."

Part 2: Commissioner

6. Appointment

The Minister must consult with the Cabinet and the Board before appointing the Commissioner. The Commissioner is an employee of SARS and has a renewable term of office of up to five years.

7. Acting Commissioner

A SARS employee may be designated as acting Commissioner for up to 90 days when necessary.

8. Proof of Appointment

The Minister's notice in the Government Gazette constitutes such proof.

9. Responsibilities

The Commissioner is the chief executive officer and accounting officer of SARS.

10. Assignment of Powers and Duties

The Commissioner may delegate powers or duties to SARS employees but not the responsibility attaching to those powers or duties.

Part 3: Advisory Board

11. Establishment

12. Constitution

Board members are appointed for renewable terms not exceeding five years. The Board consists of the Commissioner, not more than two senior employees of SARS appointed by the Commissioner, and not more than eight persons unconnected with SARS appointed by the Minister after consultation with the Cabinet.

13. Powers and Functions

The Board advises the Minister and the Commissioner on the management of SARS, the improvement of efficiency and performance in revenue collection, the terms and conditions of employment of SARS employees, collective bargaining, SARS budget, and the implementation of the SARS Act. The Board must inform the Minister of any advice it gives to the Commissioner. The Board may not advise the Commissioner on the "exercise of a power or performance of a function in terms of legislation or an agreement referred to in section 4(1)(a) insofar as those powers or functions relate to- (a) the interpretation of that legistlation or agreement; (b) the exercise of a discretion conferred on the Commissioner by that legislation or agreement; or (c) the determination of the liability of a person for any revenue."

14. Procedures

15. Disclosure of Interest

16. Remuneration.

17. Vacation of Office

A member ceases to be a member if that person resigns or if the Minister terminates that person's membership for a sufficient reason.

Part 4: Employees

18. Terms and Conditions of Employment

"(1) SARS employees are employed subject to terms and conditions of employment determined by SARS (a) after collective bargaining between SARS and the recognised trade unions; and (b) with the approval of the Minister.

(2) The collective bargaining referred to in subsection (1) must be conducted in accordance with the procedures agreed on between SARS and the recognised trade unions."

19. Pension Rights

A person appointed by SARS as an employee becomes a member of the Government Employees Pension Fund.

20. Training and Education

21. Existing Staff

"Items 1 to 5 of Schedule 2 apply to all persons in the public service who occupied posts on, or were additional to, the staff establishment of the Department: South African Revenue Service immediately before this Act took effect, and item 6 applies to both those persons and persons appointed by SARS after this Act took effect."

Part 5: Financial Matters

22. Accountability

As accounting officer the Commissioner is responsible for the stewardship of SARS's resources, the maintenance of its records, and the preparation of annual financial statements in accordance with generally accepted accounting practice.

23. Application of the Exchequer Act

The Exchequer Act, 66 of 1975, applies to SARS.

24. Funds

The funds of SARS consist of money which it is entitled in terms of section 25, government grants, fees and charges, and any other money legally acquired by it. SARS may accept donations and bequests but only with the approval of the Minister. SARS must report particulars of each donation or bequest in its annual report.

25. Chief Source of Income

SARS is entitled to money appropriated annually by Parliament for its services in respect of national and provincial revenue collection. The amount of money must be calculated in accordance with the estimates mentioned in section 26. Once appropriated the money must be paid to SARS as agreed between SARS and the Minister. The appropriation may be reviewed by the Minister and adjusted if necessary.

26. Estimates of Income and Expenditure

The Commissioner must prepare estimates as required by the Minister. Before approving the estimates the Minister must consult the Board and may refer the estimates back to the Commissioner for any adjustments he or the Board may suggest. The Minister must table the approved estimates in Parliament for debate and approval a reasonable period before the beginning of the financial year.

27. Refunds to State

"SARS must refund to the National Revenue Fund any money paid to SARS in terms of section 25(2) that has not been used at the end of the financial year, unless otherwise agreed with the Minister."

28. Audits

"The Auditor-General must audit the accounts and financial records of SARS, including those relating to the collection of revenue."

29. Annual Report

The Commissioner must submit an annual report to the Minister on the activities of SARS during a financial year. The report is similar to that required of a listed company and must be prepared in accordance with generally accepted accounting practice. It must fairly reflect the activities, performance and state of affairs of SARS. The Minister must table a copy of the report before Parliament without delay.

Part 6: Miscellaneous

30. Restrictions on Names Implying Connection with SARS

31. Protection of Confidential Information

32.Exemption from Transfer and Stamp Duty

33. Amendment of Schedule 1

"The President may amend Schedule 1 by proclamation in the Gazette." (Emphasis in original.)

34. Amendment of Legislation Affected by this Act

These amendments deal with the deletion of a chief executive officer for SARS, the replacement of the terms "Inland Revenue" and "Customs and Excise" with "the South African Revenue Service", and other consequential amendments.

35. Short Title and Commencement

Schedule 1: Legislation Administered by Commissioner

1. Union and Southern Rhodesia Death Duties Act, 1933 (Act No. 22 of 1933)
2. Marketable Securities Tax Act, 1948 (Act No. 32 of 1948)
3. Transfer Duty Act, 1949 (Act No. 40 of 1949)
4. Estate Duty Act, 1955 (Act No. 45 of 1955)
5. Income Tax Act, 1962 (Act No. 58 of 1962)
6. Customs and Excise Act, 1964 (Act No. 91 of 1964)
7. Stamp Duties Act, 1968 (Act No. 77 of 1968)
8. Value-Added Tax Act, 1991 (Act No. 89 of 1991)
9. Section 60 of the Income Tax Act, 1993 (Act No. 113 of 1993)
10. Section 39 of the Taxation Laws Amendment Act, 1994 (Act No. 20 of 1994)
11. Company Tax Amendment Decree, 1994 (Decree No. 2 of 1994), of the former Republic of Ciskei
12. Section 41 of the Income Tax Act, 1994 (Act No. 21 of 1994)
13. Tax Amnesty Act, 1995 (Act No. 19 of 1995)
14. Sections 56 and 57 of the Income Tax Act, 1995 (Act No. 21 of 1995)
15. Tax on Retirement Funds Act, 1996 (Act No. 38 of 1996)
16. Final Relief on Tax, Interest, Penalty and Additional Tax Act, 1996 (Act No. 101 of 1996)
17. The Sales Tax Act, 1978 (Act No. 103 of 1978), to the extent that it remains in force in terms of section 85 of the Value Added Tax Act, 1991 (Act No. 89 of 1991)
18. Any regulation, proclamation, government notice or rule issued in terms of the above-mentioned legislation or any agreement entered into in terms of this legislation or the Constitution.

Schedule 2: Transitional Provisions

1. Definitions

2. Abolition of Department

3. Commissioner

Effectively Mr Trevor van Heerden becomes the first Commissioner. He will serve for a period of five years from the date that the SARS Act takes effect.

4. Persons in the Service of the Department

Current departmental employees become employees of SARS on the effective date subject to section 197 of the Labour Relations Act and collective bargaining agreements reached before the effective date.

5. Persons Becoming Employees of SARS

"When a departmental employee becomes an employee of SARS, the Commissioner must appoint that employee in a post on the establishment of SARS." An employee remains subject to any decisions, proceedings, rulings, and directions previously applicable.

6. Collective Bargaining

A collective bargaining forum is established. The trade union parties to the forum are those that were parties to the Departmental Chamber of the Public Service Bargaining Council: SARS. The employer representatives must be appointed by the Commissioner.

7. Assets and Liabilities

8. Financial and Administrative Records of Department

Schedule 3: Amendment of Legislation Affected by this Act

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