By HENRI E. CAUVIN
JOHANNESBURG, Sept. 12 — The police here are not very good at catching criminals, and the post office is not too good at delivering letters.
Agency by overburdened agency, South Africa's government is struggling to right the inequalities and inefficiencies brought about by decades of apartheid rule. The progress, while remarkable, has been slow, and with each small victory seems to come an even larger challenge.
Amid the many stories of targets not reached and expectations unfulfilled, the South African Revenue Service is altogether different: an unequivocal, if understandably underappreciated, success.
No longer the lackluster bureaucratic outpost that South Africans grew to love and ignore, SARS, as the agency is known, is fast becoming the ravenous revenue machine that every bona fide government needs and every citizen dreads.
Since 1995, the first full year of black-majority rule, the state treasury's annual take has swelled by almost 100 percent, to nearly 250 billion rand ($24 billion) in the 2001-2002 fiscal year, from just over 127 billion rand in 1995-1996.
The steady rise in revenue has eased, if only slightly, the pressures on a government with far more needs to meet than money to meet them. The freshly dug water wells in rural lands and newly erected homes in urban ghettos are evidence of what has been done, the overcrowded schools and understaffed health clinics of what remains to be done. With a commitment to trimming the budget deficit, which has fallen to just below 3 percent, the government is relying on increased revenue collection to finance a big part of the country's social development needs.
Not unexpectedly, the newfound zeal has unnerved more than a few taxpayers. The wealthy are finding their assets scrutinized as never before. Investigators armed with newly acquired software, for example, are cross-checking individual tax returns with home and car ownership records and turning up lots of people living beyond their declared means.
While investigators get more aggressive, policy makers are getting more creative and are transforming the tax code. Perhaps the most notable change has been the introduction of a capital gains tax, which has sent many people searching for records they had never before had to worry about keeping. Nearly as significant has been the decision to scrap the practice of taxing people only on the income earned in South Africa. Instead they will be liable for taxes on income earned offshore as well.
Accountants are finding themselves hard pressed to keep pace with the succession of sweeping changes. "We've done 20 years of tax reform in two years," said Ian Wilson, a partner in the Durban office of PricewaterhouseCoopers. "We've moved from a relatively simple base of taxation, which was quite appropriate for a third world economy, to a system that is really geared for a first world economy."
South Africa's economy is hardly third world but it has not yet achieved first world standing. With immense wealth concentrated among a small, mostly white elite, and intense poverty still widespread among blacks, South Africa is an extreme example of inequality. Improving the lives of the millions of poor South Africans is at the center of the government's agenda.
The revenue service has been at the forefront of that, but the job is far from complete. In a country of 44 million people, the number who have not registered to pay taxes is estimated at almost 6 million, or about half of the country's working population, the commissioner of revenue, Pravin Gordhan, said. It is a legacy of black defiance, white deception and government indifference.
Some people earn too little to be required to pay taxes, and others may be inadvertently paying less than they should. But others are deliberately underpaying or not paying at all. Collectively, this is called the tax gap. No one knows precisely how much money is slipping away, but no one doubts the sum is substantial.
Narrowing that gap is the only way the government can continue to make progress in dealing with the country's vast social problems, and that requires more than stricter enforcement and new technology.
Mr. Gordhan, who was an important figure in the struggle against apartheid, said the ethos of the country had to change as well. "In the United States," he said, "it is not only the law that you will file by April the 15th. It is also now a generally accepted notion. In developing countries and countries like ours, we want to get to that point, where not only is there clear law but there's also clear convention."
It is a formidable task. Like the black students who rebelled against white-imposed curriculums of the 1970's and 80's, black workers often refused to pay the taxes imposed by a racist and oppressive government. That attitude has been difficult to dislodge.
Equally entrenched has been a culture of deceit among many whites, born of years of international isolation and the sanctions-busting mentality that took root during that era. The state spent little money on the black population, from which it nevertheless managed to collect some taxes, primarily through payroll withholding. The lion's share of revenue, from blacks and whites, was spent on the schools that educated whites, the police who protected them and the roads that ran through their communities.
With the end of white rule, the iniquities of the system were laid bare, and the black-led government that came to power in 1994, has striven to change that.
Many taxpayers say the skills of the staff at the revenue service lag its ambitions, and that the agency can make doing the right thing a frustrating exercise.
Pinky Hashe said that getting her refund, which the agency mistakenly deposited in someone else's bank account, had been an ordeal. She is a customer service representative at the airport, and had trekked to the agency's central city office hoping to resolve the matter. Instead, Ms. Hashe left with more forms, a list of instructions, and the likelihood of another trip to the office.
"I work far from here," she said as she stood outside the drab, unmarked building searching for a minibus taxi. People clutching folders full of tax records shuffled past her, in and out of the agency's office. "How can I keep coming back here? Not all of us have cars."
Pat Neervoort, a pest-control company manager, came to the same office hoping to straighten out a two-year refund dispute only to be told after three hours of waiting that her file had been lost and that she would have to come back another day. "It's like they have goal posts, but they're not quite sure where to kick the ball," she said.
Wealthy people and big businesses already on the tax rolls complain that the revenue service knows only too well where to find them, squeezing them for every last penny and treating every oversight as a crime, instead of tracking down the people and businesses who do not bother to register at all. The agency insists it treats all taxpayers fairly, but it makes no apologies for focusing on the biggest first.
"There could be a million poor people and there could be two rich individuals," Mr. Gordhan insisted, "and from the million, you might get 10 percent of what you might be getting from what these two guys haven't been paying."
But the tax collectors know that to be effective, they must be seen to be fair. That is why the taxi drivers, shop owners and others in the vast semiformal and informal sectors of South Africa's economy will eventually have to face up to their tax obligations as well.
"It's all within our radar screen," Mr. Gordhan said. "We are increasingly working on creating an awareness amongst them of what tax is and why you pay it and what its importance is."