As the strike at the SA Revenue Service (Sars) enters its second week with tax season in full swing, another 10 branches across the country have been closed since Tuesday, bringing the total number to almost 50.
This after the Public Servants Association (PSA), which represents over 5,000 of the nearly 13,000 employees at the revenue service, has called for President Cyril Ramaphosa’s intervention to break the wage deadlock as they claim criminals are taking advantage of alleged lax security at borders due to the strike action.
There were fears the industrial action by PSA and the National Education Health and Allied Workers Union (Nehawu) for inflation-beating increases could lead to Sars failing to meet its tax collection target for the 2022 tax season, which began on July 1. The agency reported a surplus of R16.7bn in April, taking tax collection to R1.563-trillion during the 2021/2022 financial year.
Undercollection of tax revenue could hurt the economy as it still tries to recover from the Covid-19 pandemic, the recent flooding in three provinces, and the July 2021 unrest. It could also force government to look at other avenues to raise funds to meet its obligations, such as contributing billions of rand each year towards social welfare.
Sars spokesperson Siphithi Sibeko, however, insisted this week that the tax collection season is going ahead as planned: “We are continuing with [revenue] collection.” The tax agency has implemented “various contingency measures in place at land border posts to ensure minimal disruption during the current industrial action at Sars”.
Sars said it would ensure that physical inspection of goods “continue as normal, with inspection finalisation being centralised and managed on a 24-hour basis”.
It would also ensure that “border operations will proceed as normal, with the available staff supported by a number of Sars officials deployed from head office and the regions”.
Strike has ‘paralysed’ Sars
In a media briefing in Pretoria on Wednesday, PSA assistant GM Reuben Maleka said the strike action resulted in the closure of “more than 80% of Sars branches, with borders being hit hardest”.
“The strike has paralysed the capacity of Sars to render services to the country. Despite this, Sars is still not prepared to engage labour on salary demands,' Maleka said.
“There is a huge congestion at the borders, with trucks queuing for days and causing frustration with drivers as some of them are transporting products that cannot be in transit for an extended period. As a result, affected companies may consider suing the state for losses.”
The PSA said the untenable situation could have been avoided by Sars tabling a real salary increase as workers were prepared to go back to work and service the country. “The PSA warns that the use by Sars of volunteers at border gates to alleviate the pressure is irresponsible and dangerous as it further compromises the county’s fragile security,” said Maleka.
There is a huge congestion at the borders, with trucks queuing for days ... As a result, affected companies may consider suing the state for losses.
— Reuben Maleka, PSA assistant GM
“Recent events include the arrest of a truck driver for transporting illicit cigarettes that were cleared by customs. There are also rumours of weapons being brought into the country through unguarded and unmanned border gates. The deployment of managers and volunteers with no custom experience and skills is exposing the country to losing millions in revenue and eases transportation of illicit products.”
Maleka said criminals were set to exploit the situation to their benefit. “The prolonged strike and absence of experienced officials at border gates will impact economic growth and cause undercollection of tax revenues,” he said.
Members of the PSA and Nehawu downed tools in May to demand increases of 11.5% and 12%, respectively, well above the 5.9% headline inflation forecast by the Reserve Bank for 2022. The two unions, which jointly represent the majority of Sars’ 13,000 workforce, resumed their industrial action last week after talks with management deadlocked.
Sars previously offered unions R70m to fund pay rises and R430m as a one-off gratuity payment for the 2021/2022 financial year. The R500m offer — which the unions rejected, saying it would mean an increase of just 1.3% and a one-off R3,000 cash gratuity — was set out in a confidential document leaked to Business Day at the time.
Sars’ 13,000 employees are paid almost R8bn, making personnel costs the biggest driver in its total expenditure of R11.7bn. In his budget vote on May 18, finance minister Enoch Godongwana said Sars had been allocated a total of R34.3bn “to build the capacity of human resources and implement ICT projects”.
Both unions have said the industrial action would continue until Sars revised its 1.39% pay hike offer currently on the table.
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