SARS is on the hunt – coming after these taxpayers
Fiscal pressures on SARS’ tax collection appear to have now compelled the taxman to actively initiate the arrest and prosecution of taxpayers who do not accurately declare their taxable income, says Tax Consulting SA.
“For a long time, it has been warned that the South African Revenue Service (SARS) possesses third-party information from banks, financial institutions, estate agents, car dealerships etc., enabling them to identify those who are not declaring their income correctly.
“However, many South Africans have not taken this message seriously enough to declare accurately and fulfil their tax obligations,” the group said.
Tax Consulting said that these taxpayers may have felt a false sense of comfort from the seeming hesitance of SARS to actively enforce its mandate through criminal enforcement.
This situation appears to have suddenly changed.
Active Criminal Cases
It has been reported that a 54-year-old medical doctor from the Eastern Cape, was arrested for numerous charges of tax fraud.
According to the South African Police Service (SAPS), the investigations revealed that the accused prejudiced SARS by more than R1.8 million during the period between 2015 and 2018.
The stated alleged offense by the accused is under-declaring his income. Red flags were raised during an audit and a complaint was lodged with the Hawks for investigation.
In another matter, two suspects are to appear before the Bethlehem Magistrate’s Court on 18 September 2023, on alleged tax evasion charges which amounted to about R4 million.
According to the SAPS, the matter was reported to the Hawks’ Serious Commercial Crime Investigation team based in Bethlehem, culminating in the summons being served.
“As SARS continues to scrutinise non-compliance, whether done intentionally or not; wrongfully, falsely or under-declaring; under tax law means repercussions. While many taxpayers have slept peacefully in the past, foreseeing the worst that can happen is a slap on the wrist with some penalties and interest; a new Hawks / SARS prosecution strategy is a game changer,” the tax consultancy said.
With tax season well underway, taxpayers should take special care to make sure this tax return is done on a complete and correct basis. They should also carefully have a look at past disclosures in their tax returns and whether the numbers disclosed are correct and everything adds up.
The lifeline available
Tax Consulting said that there are options available to taxpayers to get ahead of any tax trouble, such as the Voluntary Disclosure Programme (VDP.
The VDP offers taxpayers with skeletons in the closet an opportunity to voluntarily come forward to disclose their tax defaults to SARS.
The programme also allows the disclosure of underdeclared income or understatement of any tax liabilities.
“Most importantly, a correctly obtained and SARS-accepted VDP means that you cannot be criminally prosecuted,” it said.
While this lifeline remains available, there are, of course, legislative requirements one should meet when applying for relief under the VDP.
For instance, an applicant should be a registered taxpayer with SARS, and be up to date with their tax filing obligations.
“A prudent taxpayer will always ensure that they correctly declare their income and keep the required documentation in order to discharge the burden of proof.
“Taxpayers who have possibly underdeclared/falsely stated as per the above instances, will appreciate it is a question of ‘when’ and not ‘if’ SARS will get their dues,” the group said.
Tax Consulting warned that tax dodgers are unlikely to escape SARS’ new processes and system upgrades – placing the revenue service in a powerful position to collect what it is owed.
“The VDP process gives an effective roadmap and strategy in place to regularise your taxes and not take any criminal prosecution risks. However, the taxpayer must start this process on own initiative; as the VDP is not legally allowed once SARS is on your track,” it said.
Loading ...