SARS threatens taxpayers with court action – despite ongoing objections: report
A number of South African taxpayers who have issued objections to their SARS assessments are now facing legal action because their tax payments are in arrears.
According to a report by BusinessDay, the objections were accompanied by the requisite applications for the suspension of payment until the disputes were settled.
SARS acting spokesman Sicelo Mkosi said that the taxman does not have the power to follow collection procedures for at least 10 days after SARS has notified the taxpayer of the result of the suspension request – however a number of tax practitioners indicated that there is a larger issue at hand, as SARS does not comply with the 60-day timeframe allowed for responses to objections.
In addition, members of the South African Institute of Tax Professionals’ tax administration work group said that the suspension of payment requests do not appear to reflect on the SARS system, meaning that tax debts are collected with no regard to the suspension, resulting in the undue recovery of tax debts.
New taxes
The taxman is likely to become even less popular in the coming months as economists predict a number of new and revised taxes to feature in the 2018 budget.
Last October’s Medium Term Budget Policy Statement (MTBPS) painted a bleak picture of South Africa’s economic outlook: the consolidated debt to GDP ratio had widened to 4.3% from a target of 3.1%, the projected tax shortfall for 2017 was estimated at R50.8 billion, while debt-servicing costs were cited as the fastest growing expenditure item on the national balance sheet, said Maarten Ackerman, chief economist and advisory partner at Citadel.
“Government may also be backed into a corner by the promise of free education. They will not be willing to borrow more, and increasing the VAT rate would represent the simplest method for producing the greatest amount of income needed,” said Ackerman.
“While politically sensitive, the ANC could very well be willing to risk the controversy of this decision on the back of goodwill generated by Ramaphosa’s ANC conference victory, and the hope that any political fallout would have been forgotten by the time of the next national election in 2019.”
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