The taxman in post-apartheid South Africa : taxpayers’ perceptions for the period 1994 to 2007

Abstract

Background: On 27 April 1994, a momentous occasion for South Africa as the country ushered in the age of democracy. With this a need for the reform of tax administration to improve efficiency, effectiveness, and equity for the new and inclusive South Africa. Tax administration is vital as governments rely on tax revenues collected to fund their developmental agenda. This saw the formation of the South African Revenue Service (SARS) as a semi-autonomous organisation as per the recommendations of the Katz Commission, which was formed to investigate and report on all aspects of the South African tax administration system.

Main purpose of study: A tax gap exists and taxpayers’ perceptions and attitudes towards the tax administration have been identified as possible reasons for the non-compliance contributing to the tax gap. Although external factors may also contribute to the tax gap it is important to understand how perceptions and attitudes may affect tax compliance particularly as there is limited research on taxpayers’ perceptions. The aim of this study is to determine what taxpayers’ perceptions are towards SARS for the period 1994–2008.

Method: A total of 100 responses were received for the study with 82 of the responses being valid. The responses were collected using a Google Forms Survey, which consisted of a Likert-scale and open-ended questions. Descriptive statistics is used to analyse the Likert-scale questions and thematic analysis is used to analyse the open-ended questions. SPSS and Excel are the software programs used to conduct the descriptive statistical analysis and the thematic analysis in the study.

Results: It was found that taxpayers generally perceive SARS as a well-managed and effective organisation. Further, taxpayers understand why SARS collect tax revenue despite them feeling as though it is being used frivolously.

Conclusions: Wide ranging factors influence taxpayers’ perceptions towards SARS, many of them beyond their immediate control. SARS should exert more influence on how tax revenues are spent in fiscal policy in order to better manage the relationship with the public, who are of the opinion that SARS needs to take more accountability in how tax revenues are spent.