IS THE SOUTH AFRICAN REVENUE SERVICE COMPROMISING AUDIT QUALITY OVER QUANTITY?

Kgabo F. Masehela
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Kgabo F. Masehela: University of Johannesburg, South Africa

in ABEM Conference Proceedings from Academy of Business and Emerging Markets (ABEM), Canada, currently edited by Satyendra Singh

Abstract: Quality is one of the factors that builds an organisation’s reputation and reduces uncertainties amongst stakeholders. The South African Revenue Service (SARS) is under pressure to deliver targets set by the Minister of Finance in the yearly mid-term budget. Due to targets being set increasingly high for the collector of revenue, pressure has mounted on SARS, prompting frequent audits on taxpayers. SARS continues to lose public trust due to the poor quality audits that are being conducted. This raises the question whether quality matters with regard to audits. Quality audits would help bolster the collection process. Conversely, poor quality audits increase costs particularly due to cases being referred to objection, appeal committees or to courts. Quality in the context of revenue collection is defined as a strict and consistent commitment to certain standards that achieve uniformity. Quantity in the context of revenue collection is the number of audit cases completed with or without yielding much revenue. Guidance should be taken from countries that have proved to have effective revenue collection methods. Skilled SARS employees would conduct quality audits that would satisfy targets and taxpayer expectations, thus improving taxpayer morale and confidence in SARS.

Keywords: SOUTH AFRICA; REVENUE; AUDIT; QUALITY; QUANTITY (search for similar items in EconPapers)
Date: 2019
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