SARS is coming after these taxpayers with full force in 2023
Finance professionals, including tax practitioners, accountants and their clientele, are facing the full force of a competent South African Revenue Service (SARS) as the tax authority brings the ‘real heat’ in 2023, says Jashwin Baijoo, the head of strategic engagement and compliance at Tax Consulting SA.
Baijoo said that SARS’ zero-tolerance approach to non-compliance has been most prominent over the last two fiscal periods, applied consistently and indiscriminately to the average taxpayer or High Net Worth Individual (HNWI).
“It almost seems as though the revenue authority was merely warming up in 2021 and 2022, with the real heat being brought in 2023,” Baijoo said.
According to Tax Consulting SA, Edward Kieswetter, the commissioner of SARS, said that the tax authority is striving to balance the trade-off between taxpayer service and risk management.
“This has come to the fore on numerous occasions, with Commissioner Kieswetter proudly advocating for the organisation’s strategic objective to make compliance simple and easy for all taxpayers who voluntarily seek such compliance.”
SARS is trying to rid the country of corruption, one non-compliant taxpayer at a time, said Baijoo. The tax expert noted that the increased scrutiny of intra-group loans and financial transactions had revealed this trend.
On 18 January, SARS published a new guideline for businesses, outlining the methodology it uses to examine intra-group loans, serving as a cautionary measure to firms that the government is taking a more rigorous stance on businesses who try to gain a tax advantage of a series of transactions.
“The revenue authority’s follow-through has shown that actions speak louder than words, with numerous investigations into non-compliance, spanning from HNWIs to the illicit cigarette industry, followed by convictions and sanctions being imposed on the non-compliant parties,” said Baijoo.
How to remedy non-compliance
When it comes to a trace of non-compliance, the relevant authority has taken a no-nonsense stance with little leniency, said the expert from Tax Consulting SA.
Baijoo said that if a taxpayer wishes to rectify a history of non-compliance, they should voluntarily approach SARS, to either disclose previously undisclosed information or settle their outstanding debts.
According to Baijoo, the ‘Compromise of Tax Debt’ is a solution aimed at assisting taxpayers in reducing their liability by means of a Compromise Agreement, which is entered into with SARS.
The Compromise of Tax Debt is one solution aimed at aiding taxpayers, both individual and corporate, to reduce their tax liability by means of a Compromise Agreement (“the Agreement”), which is entered into with SARS.
Agreeing results in a non-compliant taxpayer’s liability being greatly reduced to a more affordable amount.
To protect yourself from being on the wrong side of the taxman, it remains the best strategy that you always ensure compliance, he stressed.
“As a rule of thumb, any and all correspondence received from SARS should be immediately addressed by a qualified tax specialist or tax attorney, which will not only serve to safeguard the taxpayer against SARS implementing collection measures, but also being specialists in their own right, the taxpayer and/or its advisor, will be protected from SARS’ hunt for blood,” said Baijoo.
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