9 ways SARS is targeting you this tax season

The South African Revenue Services (SARS) has launched the 2019 tax season for taxpayers who use the updated digital channels, eFiling and the SARS MobiApp.

In a major departure from previous years, the 2019 tax season is staggered to improve service to taxpayers and encourage conversion to online filing.

“This allows taxpayers who use SARS eFiling and the SARS MobiApp for smart phones and tablets, to file their income tax returns from today (1 July) until 4 December 2019,” the revenue collector said.

Taxpayers who wish to use online filing for the first time, can register from 1 July.

Taxpayers who want to file their income tax returns at a branch can do so from 1 August, through to 31 October 2019 – a far shorter period than the eFiling period.

Enforcement

While SARS has taken steps to make it easy to comply, the tax collector pointed to a number of concerning non-compliance trends. As a result, it said that it aims to address the following issues:

  • SARS said it will step up its enforcement of penalties for outstanding and late returns. “Many taxpayers still do not declare rental income from properties and we will improve our data matching in this regard by collaborating with the Deeds Office. This matching will also allow us to better enforce non-compliance in the declaration of Capital Gains Tax,” it said.
  • SARS said it will also renew its focus on monitoring income and expenses from commission earners.
  • The tax agency said it is concerned about the accuracy of declarations of distributions to and from trusts to the beneficial recipients.
  • “We have also noticed tax preparers unethically promising taxpayers that they will secure a refund. They then look for opportunities to understate income or overstate expenses. This is a serious offence and could results in criminal charges as well as financial consequences for the taxpayer who remains accountable to SARS for their submissions,” it said.
  • SARS noted that fictitious refunds are claimed for fabricated expenses and losses, as well as fictitious employers generating IRP5’s for the sole purpose of claiming refunds.
  • It said it is concerned about fraudster filing multiple returns to create refund opportunities, as well as syndicates reusing IRP5s across multiple individuals.
  • SARS said it wants to improve the integrity of its profiling capability using ‘sophisticated risk modeling’ and expanding its data set. “Last year SARS prevented over R8.2 billion fraudulent returns from being paid,” it said.
  • The tax agency said that it is working both the SAPS as well as the NPA to criminally prosecute fraudsters, with a number already successfully convicted for non-compliance. “We have also successfully convicted some of our own staff for colluding with taxpayers,” it said.
  • SARS said it will institute a renewed focus on high net worth individuals “who often arrange their affairs in complex ways”, often presenting a higher compliance risks to SARS.

Read: The tax benefits of giving to charity

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9 ways SARS is targeting you this tax season