Thank you Chairperson. Minister and Deputy Minister of Finance, former Minister of Finance, who is now the Minister in The Presidency, Director-General, Acting Commissioner of Sars and other commissioners, officials from the department, honourable guests, friends and colleagues, in view of the very serious challenges faced by Sars, it is very important for us to congratulate this very important unit of government for having done so well, in spite of the downturn in tax revenue collected in 2007-08 and the emergence of the international economic recession.
We are aware of the fact that tax revenue due depends directly on the profits of companies, the salary level of individuals together with the employment levels and VAT. We are also aware that for the past six years, that is from 2003 to 2008, Sars's collection of revenue has been growing faster than the national economy with an increase from 23,6% to 27,7% of the GDP, while at the same time tax rates have been reduced. South Africa entered the recession phase in the second quarter of this year. Huge impacts are expected on the country's economic growth that will have a spiral effect on many sectors and on the lives of the general public.
The output of South Africa will decrease and as a result of this collectables will be affected. In simple terms, consumption will be reduced because of reduced productivity, employment and disposable income. This reduction will no doubt result in a serious reduction in the revenue collected by Sars from both individuals and companies.
It is, therefore, very important for us to improve and entrench the culture of compliance in the collection of revenue in all sectors of our community. This can only be done through awareness campaigns at workplaces and companies, institutions of higher learning and primary and high schools where learners will be taught the need for and importance of complying with tax collections by Sars. We must also improve our service by simplifying procedures and processes we put in place for tax collection. This will in turn make compliance to tax collection faster and easier.
We must further go more deeply into our rural areas using our own rural languages to reach all our people. Our technologies must be made available and simpler in indigenous languages to ensure that everyone feels a part of the bigger South Africa. We must also continue to develop our staff through education, uproot corruption and instil a culture of integrity and professionalism in this organisation.
The regulatory framework, good governance and good administration will also be of immediate concern to Sars. All these, together with all other factors and commitments I have mentioned, contribute to good governance and administration of the regulatory framework.
Security and broader controls must be intensified and further improved in order to curb tax evasion and corrupt practices in these areas. Our country is losing huge amounts of money through corrupt officials who take bribes from those who are hell-bent on evading taxes and those who are not yet ready to pay tax.
It has become very important to us to mention some of the illegal activities taking place in our mainstream economy. The manufacturing of illegal drugs costs our economy millions and contributes immensely to the drug addiction of our own children. The black market and selling of fake goods at very cheap prices further destroys the greater part of the economy in this country. Our laws must be made more efficient to successfully deal with these corrupt practices which deprive us of the freedom and democracy that we fought for. It further costs the country millions in loss of revenue tax collection and results in the unemployment of our people.
We are completely aware of the devastating results of the economic recession ahead of us. This in turn must not be a stumbling block to achieve results by this important unit of our economy. It must not be a reason for us to fail to deliver on our promises made to our electorate during the elections on 22 April 2009.
We must further intensify our efforts to deliver on promises given by us to the electorate. Sars must also improve on all its working methods to deal face to face with this monster called "world economic recession" and emerge victorious.
We must also strengthen compliance by welcoming the Sars approach to promoting compliance that entails the use of education, outreach services and responsible enforcement. This approach will increase the level of awareness and understanding amongst various segments of taxpayers. The interaction between Sars and these various segments of taxpayers will encourage compliance.
We further encourage Sars to continue to draw in new taxpayers. We hope that the new system for administrative penalties will be vigorously implemented to ensure greater compliance. A focus on the management of debts, reduction of outstanding returns and improved detection, a response to commercial fraud and many other systems, will ensure extra revenue collection that will go a long way in providing much needed funds to create jobs through the infrastructural projects. On the improvement of border protection and management, as the committee we acknowledge the complexities of work that go with the hosting of large international events this year and in 2010. Sars must not tire of facilitating trade and their relationship with other departments. It must further protect South Africa's ports of entry to respect the transit of goods. It must ensure tighter security systems to prevent illicit goods from entering and leaving through our ports. These major international soccer events will no doubt pose a real threat of druglords who will smuggle in their illegal goods.
To conclude, we call for the enhancement of human capacity. As the Minister was just saying, they are planning to employ 1 000 highly qualified professionals in Sars. The committee welcomes that and we hope and wish that the management will implement this in a very expeditious manner.
As we have this beautiful and hopeful plan, it also calls for the enhancement of human capacity at Sars in critical areas and the development of customs core technical skills. It will, therefore, be necessary for Sars to consider scouting for learners at the secondary level to ensure that they train more young people who will be able to understand and be equipped with the latest technologies as a remedy to address the issue of scarce skills.
We also need to acknowledge and give thanks to all economically active people of our country, business communities, management and staff of Sars and whoever is contributing economically to the smooth running and the success of this unit. Credit must also be given to all the systems which were put in place to make the work simpler and clearer so it could be understood by a layman in the street. The ANC supports the Budget Vote. I thank you. [Applause.]