Edward Kieswetter to Stay on as SARS Commissioner, Securing Tax Authority Continuity

South African Revenue Service (SARS) Commissioner Edward Kieswetter has solidified his commitment to South Africa's tax administration by accepting a two-year extension to his term. This strategic move by President Cyril Ramaphosa not only underscores the value Kieswetter has added to the organization but also underscores the crucial need for leadership stability and continuity at the helm of the tax authority.

Kieswetter's initial tenure began in March 2019 amidst challenging circumstances. Tasked with restoring the integrity and capacity of a tax authority that had suffered considerable decline during the tenure of its former Zuma-era commissioner, Tom Moyane, Kieswetter's five-year term has been marked by measurable successes. With his term set to conclude at April's end, this extension allows him the opportunity to guide SARS towards a smooth leadership transition, a necessity he had previously discussed with President Ramaphosa in early February.

This decision for extension partly stemmed from Kieswetter's personal reluctance to commit to another full five-year contract for family reasons. Hence, an additional two years serves as a pragmatic solution allowing him to continue his impactful work while also preparing for a succession plan.

There is speculation that the baton might pass to the distinguished Johnstone Makhubu, currently the SARS deputy commissioner for taxpayer engagement and operations. Makhubu's rise through the ranks since joining SARS in 2016 demonstrates an institution rebuilding from within, cultivating expertise and leadership apt for future challenges.

The transformative impact of Kieswetter's leadership is quantifiable. Tax compliance has improved significantly, with a reported 26% year-on-year increase in additional revenue—R210bn—that would not have been recouped without the tailored compliance measures implemented. Utilizing tools such as big data analysis, Kieswetter has pushed the compliance rate up, with the potential for further gains as the current level sits at around 65%.

Even more concretely, SARS has registered cash receipts totaling R124.7 billion through compliance efforts, a notable increase from the previous year's R105.1 billion. Measures aimed at preventing leakage have been equally successful, contributing R85.6 billion, up from R61.8 billion in previous periods.

In sectors such as large business and international trade, enforcement actions have brought in R17.2 billion, while crackdowns on syndicated tax and customs fraud have yielded an impressive R13.5 billion, demonstrating a remarkable 246% increase. SARS's focused approach in recouping outstanding debt has also added around R70 billion to the fiscal pool.

This financial strengthening comes even as South Africa navigates a weak economy, with SARS striving to meet the Treasury's revenue estimates. Though the Treasury had to reduce its revenue estimate by R57 billion during the medium-term budget policy statement in November, developments such as the sale of strategic oil reserves have lent unexpected boosts to sectors like mining royalties, leading to a revenue shortfall being trimmed in the recent budget.

With President Ramaphosa securing the leadership at SARS, attention turns to another critical segment of South Africa's financial landscape—the Reserve Bank. The treasury and the country await the announcement of appointments, including that of a new deputy governor to succeed Kuben Naidoo, with anticipation. Decisions on these vital roles should emerge shortly, as suggested by Finance Minister Enoch Godongwana, marking another chapter in fortifying South Africa's fiscal governance.