Source: IDC, 2000
3.9 Internal Analysis
In order for an organisation to attain sustainable competitive advantage, it needs to analyse its external environment as well as its internal capabilities and resources to provide a strategy that best fits the organisation. The SWOT analysis is a useful analytical tool to establish whether the company's present strategy is working and the opportunities and threats that could affect its future success.
3.9.1 Strengths
Strengths are skills, valuable assets, expertise or habits that are developed by an organisation that enables it to attain enhanced competitiveness.
3.9.1.1 Revenue Performance
The SARS has constantly played a strategic role in managing South Africa's fiscal policies.
During the periods from 1995 to 2003/4 tax periods, SARS has offered large tax relief to the consumers. During the 2003/4 period SARS contributed a total of R13.2 billion in tax relief.
Table 3.18 indicates a summary of the tax relief granted to individuals.
Table 3.18 Tax relief granted to individuals
Year igea^Q igg&co
2CCQ/D1 2C01/D2 20D2/CG 2C03AM
fl'DOD
3700 000 4850 COO 9900 COO 8308 COO 15 000 000 13 250 COO
Source: SARS Annual Report, 2003
Table 3.18 indicates that SARS has consistently exceeded its revenue performance. This has been mainly due to real economic growth, evidenced by increased international trade and corporate earnings and a more focused enforcement approach. Further to this through transformation efforts, efficiency gains have been realized. SARS exceeded the revenue target for the 2003/4 period by R13.7 billion and the revised estimate by R2.1 billion. This exceeded the previous year's figures by 11.8 percent.
The improved revenue collection has enabled the government to increase spending on vital public service goods and services, as well as reduce government debt. This has indirectly boosted investor confidence.
For the year that ended 31 March 2004, government needed R 340 billion to pay for the basic services to South Africa. Figure 3.13 indicates that R310 billion is expected to come from tax collections and the rest from public borrowings.
Figure 3.13 Budget Deficit Implications
(EG. POVERTY, SUSTAINABLE DEVELOPMENT)
V _J Source: SARS Way brochure, 2003, Pg 4
While meeting and exceeding the target is vital, SARS has to ensure that the collections are also consistent throughout the year. Figure 3.13 indicates that any short fall means that South Africa has to incur immense borrowing cost in the form of interest payments that can total in the region of R51 Billion (SARS Way Brochure, 2003), consequently leaving the South Africans worse off.
SARS increasing integration into the global economy has indicated marked changes in its indirect tax types especially in the following:
± Fuel Levy
An amount of Rl 5.334 billion was received in respect of fuel levy during 2003, which was R168 million greater than the printed estimate. The difference is due to the slightly higher than anticipated fuel sales. Figure 3.19 indicates a marked improvement in the sale of fuel from 2002 onwards. This could be interpreted to mean greater economic activity within the country together with the implementation of payment of fuel levy at source provided for improved efficiency in the collections by SARS.
Table 3.19 Growth in fuel sales
Year
\mm
IBQGfflO 2CTOD1 20O1/D2 20G2/DS
Increase
Q,G%
0,7%
(2,2%) 1,8%
2.9%
Source: SARS Annual Report, 2003
4- Excise Duty
Excise duty collections amounted to R 11,473 billion, which exceeded the printed estimate by R406 million. This was attributable to gains in the consumption of spirits, cigarettes and ad valorem duties.
3.9.1.2 Service Monitoring Office (SMO)
In line with international best practices and as part of SARS commitment to customer services the SMO was launched in October 2002. In establishing this office SARS resort to the speedy resolution of complaints which could not be resolved in the normal operations channel. SARS also sends a clear message that in collecting revenue it will ensure that administrative actions are lawful, reasonable and administratively fair as guaranteed by the constitution.
Although the SMO does not report to the parliament it functions independently from local branch offices and reports directly to the Commissioner. This enables the Commissioner to gain first hand knowledge regarding problem areas from an independent source and to take the necessary steps to pursue resolutions.
While the SMO received 7246 complaints, the success should be measured not on the number of complaints received but the number resolved. This included following types of remedial action:
^ Holding branch office accountable for speedy resolution.
•4 Reprimanding branch offices management and staff were warranted.
4- Tracking the service delivery of the offices and the issues raised.
^ Process improvement where the underlying problem relates to the administration system.
3.9.1 JCustoms Quality Management System (QMS)
The Customs QMS has been rolled out to ensure consistent application of rules and regulations relating to the Customs and Excise Act 91, of 1964. The QMS system rolled out is envisaged to develop a culture of standardized processing in customs centred around the country with the aim of attaining the ISO 9000 accreditation for policy and processes.
3.9.2 Weaknesses
A weakness is a resource or a skill that the organisation lacks or performs poorly (Thompson and Strickland, 2003). South Africa is entering the global world after years of isolation, this has inadvertently created major skills miss match together with the debts inherited from the previous regime have reduced South Africa's competitiveness among the likes of other developing countries such as Malaysia and India.
3.9.2.1 SARS Worsening Debt Situation
While SARS is focusing its attention to the worsening debt situation, however has not done enough. SARS debt as a percentage of total revenue is 19.8 percent. When compared to other countries, they reveal ratio's of 8 percent for the Organization for Economic Development and Corporation, Canada 5.3 percent, Ireland 4.01 percent. Australia 5.3 percent and New Zealand 3.7 percent. Table 3.20 illustrates the outstanding debts at 2003 year end.
Table 3.20 SARS Outstanding Debt
heM duals Compart es