SARS is finding a new way to get info on taxpayers

 ·17 Apr 2023

A draft public notice from the South African Revenue Service (SARS) indicates that the taxman wants to use solar installers to gain additional information on taxpayers.

According to tax experts from Tax Consulting SA, SARS is proposing that solar installers report taxpayer information directly to the authority.

The group said this is an “innovative approach” by the revenue service to tackling non-compliance at the same time as enabling the newly proposed tax credits for solar panels.

“SARS will know exactly who had the money to install solar, and the tax refund claim promises to be seamless for compliant taxpayers,” said the tax firm.

“This appears very much part of the SARS drive to ensure compliance and embrace technology for taxpayer data collection.”

Notably, the new announcement from SARS considers imposing a requirement on the solar installer to report taxpayer and solar installation information where the solar installation is affected at a domestic residence.

It is further proposed that the notice will be backdated to 1 March 2023.

“Should this be implemented, taxpayers who have installed solar panels at their domestic residences since 1 March can expect to be reapproached by their solar installers to collect the information which they are required to submit to SARS,” said Tax Consulting SA.

The latest draft public notice was issued in the tax authority’s latest information gathering laws – requiring select third parties to submit returns containing specific information.

Tax Consulting SA said that under the current regime, organisations such as banks, financial institutions, listed companies, and medical schemes are required to submit third-party returns to SARS, detailing relevant taxpayer information, transactions, and amounts involved.

Solar installers seem to be the next institution that will be added to this list, said the tax firm.

As a result of the draft public notice, the person who issues a solar installation certificate of compliance for the installation of either new or unused solar panels at a domestic residence will have the responsibility to disclose specified information.

The reporting obligation is aimed at the certificate of compliance issued on completion of a new solar installation.

Some of the mandatory information includes:

  • Income tax reference number or, if no income tax reference number is available, the identity number of the person on whose behalf the installation was done
  • The physical address of the installation
  • Cost of the solar panels
  • The date on which they were first brought into use

The draft public notice was issued under the Tax Administration Act, that among other things, empowers SARS to gather third-party information and impose penalties on those who do not comply.

Section 234(2)(d) of the Act provides that any person who wilfully or negligently fails to submit a return to SARS when required to do so commits a criminal offence. As a sanction for a such criminal offence, a fine or imprisonment for up to two years may be imposed, said Tax Consulting SA.

Read: Government was warned this would happen

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