South African Revenue Service (SARS) commissioner Edward Kieswetter says that his team is ready to offer support to taxpayers impacted by Covid-19 and the recent looting – but warned that the tax collector will still chase after those who are non-compliant.
Kieswetter said SARS will endeavour at all times to “make it easy and seamless for taxpayers when they transact with the organization”.
However, he warned that SARS has the capability to detect and it make it costly for those that are determined to be non-compliant with their legal tax obligations and engage in criminality and fraud against it.
He said the use of big data, artificial intelligence and the latest technology enables SARS to both help taxpayers – by offering digital services to protect them and staff during the Covid-19 lockdown restrictions – as well as reinforce its capacity to clamp down on tax dodgers.
Kieswetter said SARS will also increasingly focus on tax mistakes as it has effectively lowered the threshold to criminally prosecute taxpayers.
Prior to the latest tax amendment legislation becoming final, a taxpayer could only be liable for a fine or subject to imprisonment if the relevant transgression was committed “willfully and without just cause”.
Kieswetter said that the change will bring the revenue collector in line with other international tax authorities and that South African tax legislation has previously embedded these principles.
“This is not introducing something which is completely new, it is simply regularising which was an oversight in the 2011 Tax Administration Act formulation,” he said.
“Many commentators, with some degree of sensationalism, are projecting a scenario where the state will have a free-for-all against taxpayers.”
However, Kieswetter said that this is not the case and that the state is still required to prove blameworthiness when pursuing taxpayers. He added that this needs to be proven beyond a reasonable doubt.
Additional relief measures
President Cyril Ramaphosa on 25 July announced several emergency tax relief measures in response to the continuing Covid-19 pandemic and recent unrest that are aimed at helping affected and tax compliant businesses to recover and ensure livelihoods for employees.
Kieswetter said that SARS will implement these tax relief measures because compliant taxpayers have paid their fair share of tax making it possible for the government to provide such a temporary safety net in a time of extreme difficulty.
The measures which SARS will implement are:
- The extension of the expanded Employment Tax Incentive age eligibility and the amount that can be claimed, which is aimed at supporting employment in the most vulnerable sections of the labour market. This will apply for a period of four months and will come into operation on 1 August 2021 and end on 30 November 2021.
- Extension of the deferral of the payment of employees’ tax liabilities (commonly referred to as PAYE) for tax compliant small to medium-sized businesses. This will come into operation on 1 August 2021 and end on 31 October 2021.
- Tax compliant businesses with a gross income of up to R100 million will be allowed to delay 35% of their Pay –As- You Earn (PAYE) liabilities over the next three months, without penalties or interest.
- Deferral of excise duties on alcoholic beverages of up to three months by tax-compliant licensees in the alcohol sector, on application, setting out the circumstances justifying a deferral.