SARS is coming after these two sectors in South Africa

 ·2 Apr 2024

The South African Revenue Service (SARS) has placed e-commerce and the alternative energy sectors into its sights as it aims to sniff out opportunities for “maximum revenue collection”.

The taxman also said it intends to increase the number of prosecutions against non-compliant taxpayers this year as it tries to make it as difficult and expensive as possible for those looking to flout their tax obligations.

In the group’s annual performance plan for 2024/25, the taxman said that its overall “strategic intent” is to make it easier for taxpayers and traders to be tax-compliant while making it a costly affair for those who willingly and deliberately refuse to comply.

In pursuit of this ideal, SARS has, over the years, started building what it calls a ‘modern revenue service’, with new technology and systems in place to sniff out taxes owed and to automate much of the process of submitting returns each year.

For 2024/25, SARS said it would continue to build on this, using technology like artificial intelligence, machine learning and virtual platforms to make meeting tax obligations much easier.

However, as part of this push, the Revenue Service said it would also refer more cases of outstanding returns for prosecution.

“To deal with deliberate refusal to comply, SARS will apply the law fully without fear or favour,” it said.

SARS noted that while its ideal is for South African taxpayers and traders to submit returns and taxes voluntarily, it will also enforce compliance and make it hard and costly for taxpayers to remain non-compliant.

To this end, it said it will also intensify compliance initiatives to root out syndicated tax and customs crime. As part of its goals for the year, it wants to actively collapse at least three “significant illicit schemes”.

The taxman said it will also identify new opportunities to increase revenue – including developing strategies to “collect tax optimally” from “ever-growing” online transactions and e-commerce.

It will also monitor the “growing alternative-energy sub-sectors” to ensure enhanced compliance levels and maximum revenue collection, it said.

Bleak outlook

SARS said that the current “lacklustre” economic landscape in South Africa, characterised by high inflation and high interest rates, poses a significant risk to tax collection this year.

“South Africa’s domestic economic outlook is bleak. Deteriorating macro-economic fundamentals are expected to depress real GDP because of more frequent and severe power outages as well as decreasing commodity prices,” it said.

“These difficulties will harm tax revenue collection.”

The revenue service also flagged political problems – most notably poor public service delivery and corruption – which have damaged public confidence in the government, undermining efforts to boost tax compliance.

“Citizens’ deteriorating interest in politics accompanies an upsurge in service-delivery protests, continued political uncertainty due to unstable local government coalitions, load shedding, and perceptions of corrupt activities by senior officials,” it said.

“Research shows that taxpayers’ attitude toward tax compliance is influenced by how they perceive tax revenue is used.”

Despite these challenges, SARS said it will continue to find ways to build public trust and pursue its objectives.

Read: SARS gets serious about solar

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