SARS accused of withholding tax refunds to boost collection numbers: report
Parliament’s standing committee on finance has instructed the SA Revenue Service (SARS) to address allegations that it delays tax refunds, offsets refunds by raising new assessments, and has automatic stoppers to prevent refund payments.
Yunus Carrim, chair of the committee, said that there is no evidence at this stage that SARS is deliberately withholding refunds; however, he said that the negative financial effect it could have on individual taxpayers or businesses concerned the committee, reports Fin24.
“A perception has been created that in the current fiscal year SARS’ performance is on the basis of withholding tax refunds. Is that correct or not? There is a perception out there that SARS has withheld tax refunds. We need clarity so we can bury the issue,” Thandi Tobias-Pokolo, a member of the committee, told Moyane.
“Also, there is a perception that SARS has offset the refunds that should have taken place in the current year for future years. We need clarity if that is the case,” she said.
Carrim said one should welcome some of the achievements of SARS, but, on the other hand, “issues of race” cannot be used as a defence by SARS each time it is challenged. He explained that most people who complain to him about SARS are actually “African”.
Late payments
In September the Tax Ombudsman found that SARS’ system unfairly delayed payment of refunds to taxpayers. The ombud said that the findings were not only based on complaints received during the previous tax year, but over the course of multiple years.
The number of such complaints has run into hundreds recently within a short space of time, it said.
“In the period November 2016 to March 2017, we received no less than 500 such complaints; half of which were validated. While the number of complaints received is important, this is not necessarily indicative of the financial magnitude or impact of the problem because one claim may run into millions,” it said.
“The impact of the withholding of refunds may be devastating to the taxpayer. What appears to be a small claim may have serious cash flow impact on that small taxpayer company, or an individual.”
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