An efficient and trusted tax administration is one of South Africa's institutional strengths. SARS has played an integral role in building the democratic state by ensuring that expected levels of revenue are available to fund spending programmes. SARS must continue to develop the skills and capacity needed to enforce legislation and strengthen its efforts to curb tax avoidance and evasion, and address transfer pricing – a component of illicit financial flows.

Madam Speaker, I requested the Davis Tax Committee last year to advise on an appropriate governance and accountability model for SARS. This was last done by the Katz Commission in 1994. In the context of the envisaged Border Management Agency, customs and excise administration has come under review. These are integral functions of our revenue system and the Davis Committee has advised that it would be imprudent to fragment customs administration and customs collection. I agree with this, particularly in the light of SARS’s ongoing customs modernisation programme which is critical to both our revenue and trade policy imperatives. Let me express my appreciation to the Deputy President and Minister Gigaba for the ongoing engagement on this matter.

Continued strengthening of the capacity of SARS and enhancing its relationships with taxpayers is vital for our fiscal health. We will continue to call on Judge Davis and the Tax Committee for advice on how best to ensure that SARS remains a robust and effective tax collection agency.