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CHAPTER 2- THEORETICAL MODEL OF STRATEGY
3.5 Analysis of the Environment
3.5.3 Social
4> The warehouse inventory management system, this included an electronic register that updated the stock that was placed in warehouses were duty was suspended for a period of time.
-4* Removal in bond and removal in transit systems were implemented to allow for automatic acquittal of goods moving between customs control areas and customs authorities in the African countries.
In 2002 the single registration process was approved and demonstrated. The focus of this process was to allow a client to have a single registration number across tax product types. This single view process is aimed at having generic customer details as well as product specific details that would provide a comprehensive profile of a client.
the over whelming challenge of poverty and sustainable development, if we cannot raise adequate funds these service deliveries will be compromised or alternatively require our country to borrow the funds from abroad. Figure 3.3 indicates the drivers of revenue that assist SARS in achieving its objectives.
Figure 3.3 Drivers of Revenue
What brings the money in?
The drivers of revenue collection can be illustrated as follows:
^ ^ M
Revenue ^
TARGET | ^ p
R310 BILLION ^ k
^ M ^ ^
IK I H
jH B
KW
ECONOMIC FACTORS AVOIDANCE FACTORS
TAX GAP FACTORS
t
efficiency and QUALITY of work
Source: The SARS Way Booklet, 2003
+• Economic factors are driven by the state of the economy and are beyond SARS control.
This is the largest contributor to our income. In times of economic down turn more aggressive intervention activities are needed to generate additional revenues.
± Tax avoidance, there exists in any system legal loop holes, SARS identifies these loop holes and changes policies and legislation to close these gaps.
4. The current tax gap, due to declarations been made that are intentionally aimed at clients illegally obtain a financial gain. According to the SARS way brochure, 2003 we have over 16.5 million clients that are economically active of which SARS only knows 7.3 million. Recent studies have indicated that SARS tax gap maybe as high as R30 billion of which customs constitute a gap of Rl .5 billion (SARS way booklet, 2003).
4- Efficiency and quality of work, effective and efficient performance with good internal controls can significantly contribute to the revenue collections for SARS. The 2004
estimated revenue target for SARS is R333.3 Billion of which customs needs to collect R85.6 billion (Customs Divisional score card, 2004).
3.5.3.2 SARS Transformation
In 2000, SARS adopted a transformation strategy under the project name Siyakha, to fundamentally change the business process and policies. The need for transformation was as a result of the need to move from a highly bureaucratic inward focused organization to one that was a high performance organization. This transformation was aimed at improving the skills level as well as the skills mix and by providing enabling technology to deliver a high level of service to it clients. According to the SARS annual report the transformation was implemented in 3 different phases.
4k Short term changes- this consisted of infrastructure and process improvements. The traditional isolated work environment was changed to a team orientated process were skills could be shared and enhanced.
^ Short term to medium terms changes- this consisted of a new business architecture, policy changes and organizational design enhancement.
•«t Medium to long term changes- new automation and technology platform, continuous policy and process improvements.
During the periods of October 2001 and September 2002 customs offices were restructured focusing on the implementation of new management teams, new business processes such as anti- smuggling teams, post clearance inspection teams and risk profiling teams. The transformation was effectively followed up by awareness campaigns and aggressive communication drive to educate the staff and to minimize the resistance to change.
Change is on going and SARS will endeavour in the next three years to achieve the following changes:
4v Implementation of the Large Business Office, to better manage the tax affairs of large corporate sectors in an integrated manner.
4> Focus on trade facilitation and supply chain management with enhanced skills and technology.
4> Improving service standards by implementation of e-S ARS by migrating to an electronic transaction environment.
4> Building business intelligence by improving risk profiling and providing a single view of a client across all tax and duty types.
3.5.33 Service
"SARS at Your Service ", represents the philosophy adopted to describe the nature and quality of there engagement with clients. This serves to embed the strong service orientation in accordance with the principles of Batho Pele and the SARS values.
In line with international best practices SARS launched the service monitoring office (SMO) in October 2002, this office serves to facilitate the speedy resolution of complaints that could not be solved through normal operational channels.
Remedial steps that have been taken by the SMO include:
4> Holding branch offices accountable for the speedy resolution of queries.
4> Reprimanding office management and staff were required.
4K Tracking the service delivery offices when required.
4- Process improvement where the underlying problem relates to the administration system.
3.5.3.4 The SARS Culture
SARS is an organization of approximately 14 000 employers of which 2715 are spread across customs activities. Table 3.9 provides a demographic break down of the staff within customs.
Table 3.9 Customs Demographics