The South African Revenue Service is making good on its promise to chase after taxpayers who are non-compliant, having been discussed for months by commissioner Edward Kieswetter and re-emphasized in a media statement in August, says Jashwin Baijoo, legal manager at Tax Consulting SA.
Baijoo cited a recent case where a taxpayer was served with a summons to appear in the magistrate’s court, charged on not one but 29 counts of non-compliance.
“Without limiting any prospects of recovery, the revenue authority evidently did its homework, and duly investigated the behaviour of the taxpayer, with counts 1 – 11, on the non-submission of the taxpayer’s PAYE returns, which is an integral part of the operations in any business,” he said.
“The same can be said for counts 12 – 24, which focused entirely on the non-submission of the taxpayer’s VAT returns and counts 25 – 29 canvassing the taxpayer’s non-compliance from a Corporate Income Tax perspective.”
Baijoo noted that SARS has made good on its word of increasingly focusing on non-compliance, including tax mistakes, which enable the prosecution of taxpayers for offences committed ‘willfully and without just cause’.
“Matters of non-compliance are not to be taken lightly by taxpayers, and even the smallest mistake can land you in serious hot water, with the Hawks knocking at your door, to personally deliver your invite to a rendezvous with the revenue authority,” he said.
The solution to non-compliance
Other cases show SARS upping its collection power to offset a massive budget deficit with aggressive collection steps, including salary garnishes, sheriff callouts, and even taking money directly from business and/or personal accounts, said Baijoo.
“Now is not the time to take risks. SARS’ approach clearly shows we are dealing with a competent revenue authority, so why risk it when compliance is evidently the preferred way forward, which SARS is willing and ready to assist all taxpayers with, as advised by commissioner Edward Kieswetter, stating that SARS will do its best to ‘make it easy and seamless for taxpayers when they transact with the organization’.
“This statement, when SARS is correctly legally engaged, is evidently made by a revenue authority that is steadily aligning itself with international standards and climbing back to its former prestige as one of the world’s finest,” Baijoo said.
To protect yourself from possible jail time, it remains the best strategy to ensure compliance, he said.
Where you find yourself on the wrong side of SARS, there is a first-mover advantage in seeking the appropriate tax advisory, ensuring the necessary steps are taken to protect both yourself and your unblemished record from paying the price for what could be the smallest of mistakes.
“However, where things do go wrong, SARS must be engaged legally, and we generally find them utmost agreeable where a correct tax strategy is followed,” Baijoo said.