Chairperson, it is an honour to participate in a session chaired by one of our women struggle icons. I feel very humbled. Hon Ministers, hon Deputy Ministers, my colleagues Members of Parliament, distinguished guests, the National Treasury team, we agreed as the ANC collective that the SA Revenue Service, Sars, as an organ of state has a mandate to contribute directly to the economic and social development of the country in order for government to meet its priorities. Cognisant of that fact, our ANC-led government through the National Development Plan, NDP, 2030 vision adopted a New Economic Growth Path to drive the economy. In order to achieve the noble objective of the NDP, Sars is expected to continue to effectively collect the revenue required by the government to meet its fiscal and policy responsibilities, as well as continue to facilitate legitimate trade in order to grow the country's economy.
In addition, Sars is expected to promote effective government, strong leadership and active citizenry by, among other things, continuing to improve service and raising compliance; continuing to partner with government units to improve the state's overall effectiveness and efficiency; engaging with other players in tax and customs administration, regionally and internationally; reducing the cost of compliance and the cost of doing business in South Africa; raising the competitiveness and export earnings of the country through the efficient and effective facilitation of legitimate trade; ensuring that Sars is corruption free and assisting in anticorruption measures across government, particularly in procurement processes; and drawing all citizens and entities into a relationship with Sars.
It is crucial to note that this Budget Vote is set in the context of continuing global financial stability concerns. Developments in the global tax environment have implications in the manner in which Sars collects the revenue required to meet government's fiscal responsibilities. The current global economic environment, which, inter alia, is characterised by slow growth, has produced significant shocks worldwide that have led to drastic changes in tax revenue performances and large swings in government deficits and debts. As a country, South Africa has not been immune to the impact of this unfortunate environment.
To compound matters, sophisticated tax avoidance and evasion schemes that lead to the erosion of the tax base of countries and possibly causing major risks to the country's fiscus proliferate. A recent report, by the Organisation for Economic Co-operation and Development, OECD, on addressing base erosion and profit shifting established that greedy and callous multinational corporations continue to use sophisticated schemes like intragroup transactions, transfer pricing manipulation and hybrid mismatches to exploit loopholes in local tax codes, double taxation agreements and tax treaties to avoid or significantly minimise their tax obligations in countries where they operate and make profits.
The recent agreement by the Group of 20, of which South Africa is a member, to adopt the proposals of the OECD report to counter these abusive schemes is welcomed by the ANC as a step in the right direction.
This Budget Vote, inter alia, undertakes to conduct research on large companies' deductions and benchmark findings against industries' norms to establish gaps in order to strengthen risk profiling. This will go a long way towards enhancing compliance by large businesses.
Increased Sars involvement in international exchange of information programmes through continued engagements with other countries' tax authorities will improve Sars' ability to trace the flow of funds, and also ensure that Sars is familiarised with these ever changing schemes and develop the skills and collaborations needed to combat the erosion of the South African tax base. Subsequently, everyone who has the use of our beloved country's public resources will pay their fair share in taxes.
We are comforted by the fact that in order to strengthen external relationships in the customs environment in the region, Sars has resolved to place more focus on regional information exchange which seeks to reinforce customs' ability to expedite regional trade. This will be enhanced further by electronically interconnected systems and aligned customs databases. In order to minimise the administrative burden in customs for travellers, this Budget Vote confirms that Sars will be implementing the Passenger Processing System, PPS. The PPS will ensure that the traveller's experience when entering or leaving our country is improved to the best ever. Also, easier security and data exchange between the different border agencies will be realised. It is hoped that through these initiatives the long queues that our border posts are experiencing will be something of the past.
The Budget Vote further confirms that Sars will be deploying a batch of cargo, container and baggage scanners at selected ports. This will ensure that Sars' risk management capabilities in customs are strengthened. The proliferation of illicit cigarettes is a major concern to our committee. As a country, we are currently experiencing significant losses in excess revenue. It is estimated that there is an annual loss of between R4,5 billion and R6 billion to the fiscus due to the smuggling and consumption of contraband cigarettes. The earmarked increased supervision of cigarettes exported via warehouses and targeted communications campaigns with industry and consumers is highly welcomed. This will empower our smokers to differentiate between "makoya" [authentic] and fake - "fong kong" - products, but also to understand the risks illicit cigarettes pose to their health and the economy.
Let us take our cue from the words of wisdom by our living legend Tata Mandela when he said, and I quote:
Our youth is our future. Whether our country will rise from the ashes of apartheid to become one of the world's success stories will to a large extent depend on what we invest in educating and training our youth.
This Budget Vote confirms that Sars will implement the youth employment incentive scheme. [Applause.] Unlike some who want everyone to believe that this is the only effort by our government to address the unemployment challenge, this scheme is one amongst a plethora of initiatives meant to deal with youth unemployment.
This initiative attempts to give effect to government and private sector commitment to the spirit and the letter of the Youth Employment Accord, as signed by government representatives and social partners, including those who all of a sudden are hell-bent to peddle blue lies at any given opportunity about the accord.
It seems as if a certain Mr Gana Makashule, who was sent to represent and sign on behalf of the blue liars, failed to report back on the outcome of a meeting where this accord was signed. Anyway, out of the ubuntu values, that are in abundance and are exhibited by the ANC members, allow me to reiterate some of the key interventions meant for youth employment. Those are to improve education and training opportunities for the gap grouping between school-leaving and first employment; to connect young people with employment opportunities through, amongst others, the support for job placement schemes and work readiness promotion programmes for young school- leavers; and to provide young people with work experience. By the way, youth entrepreneurship and co-operatives are also encouraged. [Interjections.]
I must indicate that no amount of howling will sway us from implementing an agreement. Howling is mere opportunism, political expediency and seeking to appropriate what the ANC-led government has initiated.
As indicated by the Minister, South Africa needs leaders who can serve as good ambassadors, not howlers or opportunists whose arguments lack content and substance. South Africa needs leaders with content.
Sifuna abaholi abakhuluma into enomqondo. [We want leaders who will make sense when they speak.]
The Budget Vote further confirms that Sars will continue to make improvements to its administrative systems and processes in order to reduce the administrative burden on taxpayers and traders. This will, inter alia, be realised by the rationalisation of corporate income tax return forms so as to minimise the administrative burden on the taxpayer.
As the ANC, we are satisfied that this Budget Vote will ensure delivery of cost-efficient, rapid and reliable service to all taxpayers and traders, hence our unconditional support. Thank you. [Applause.]