26 OCTOBER 1995


On 18 October 1995 the Cabinet approved that a reform process to restructure Customs and Excise and Inland Revenue and establish an autonomous revenue services entity, to be known as the South African Revenue Services (SARS), could now begin in earnest.

The recommendations made to the Cabinet follow the recommendations of the Katz Commission and subsequent detailed research done locally and internationally.

"There is an international precedent for revenue reform. The challenges facing South Africa are not unique. Reform, tried and tested in Australia, New Zealand, Malaysia, Indonesia, Singapore, UK, Canada and elsewhere was studied. The advice of experts on the reform of tax administration was sought. This is a well researched issue," Minister of Finance, Mr Chris Liebenberg, said today.

The Joint Standing Committee on Finance, the Portfolio Committee On the Public Service and the Public Service Commission, were consulted prior to the recommendations being made to Cabinet. There has been much speculation in the media as to the relationship the new autonomous revenue service will have with the Public Service. Mr Liebenberg said that, contrary to recent reports, the new service would be within the discipline and control of the Public Service.

"Cabinet has accepted that the case of a Revenue Service has to be looked at differently. The proposals will allow us the flexibility, within the Public Service, to be able to match the client with our personnel and technical skills."

The principles, agreed by the Cabinet, on which the reform is to be based are the following:

"At the crux of the proposals is the split between philosophy and policy on the one hand, over which the Minister and the Department of Finance will continue to preside, and administration and implementation on the other hand, which will be operated on a much more businesslike basis under the auspices of the Board and the Chief Executive" said Mr Liebenberg.

The benefits of reforming the revenue services:

"The principles of the reform process of Inland Revenue and Customs and Excise have been agreed upon. This was a major step forward. Government has been faced with the problem of a deteriorating Revenue Service for over ten years, but now we have Cabinet support and commitment to proceed with this enormous task. The details of how this is to be implemented still need further refinement and development, as well as commitment and co- operation from current staff. The first and most important step in the programme, therefore, is to discuss and negotiate the terms of the reform with the personnel and their representatives."


It was found in the research on international examples of reform that staff were kept informed of the process every step of the way. In the light of this, today marked the first in-house broadcast by the Ministry and Department, to staff countrywide. More than 4000 employees took part in a live television discussion with the Minister and Deputy Minister of Finance, the Director General of Finance and the Commissioners of Customs and Excise and Inland Revenue.

"This will be the first in a number of methods we will use to keep our staff in touch with the process."

[ DISCLAIMER & Index | Mail Webmaster | About Webmaster ]