SARS is coming after taxpayers in South Africa hard with new ‘masterstroke’ move

The South African Revenue Service (SARS) is tapping into the skills of private-sector tax practitioners to pursue tax dodgers and avoiders—in what experts are calling a “masterstroke” move by the commissioner.

SARS announced a new tender on 26 August to appoint a panel of specialist tax consulting firms for a period of five years.

According to Tax Consulting SA, this will give the service and commissioner Edward Kieswetter “immediate access” to the minds of private tax consultants, who will be able to give insights into tax evaders and close some gaps that may be overlooked.

This should help the taxman “catch tax evaders, tackle non-compliance, and get additional tax brainpower to deal with highly complex and sophisticated tax structures,” it said.

It is not clear how many panel members will be appointed.

However, each panel member can submit the resumes of up to a minimum of 88 tax specialists, ranging from Junior to Senior tax professionals, and it is explainable that the tender covers all tax types and a vast array of technical and tax compliance-related items.

Tax Consulting said this will go a long way in assisting Kieswetter in tackling his two biggest challenges—having enough quality resources and the expertise to understand the most complex tax avoidance or evasion schemes.

“(These) will almost instantly be fixed,” the group said.

“The capacity of SARS to take on far more complex tax matters, including forensic audits and corporate restructures, will immediately be bolstered.

“The same tax practitioners who have for years complained about SARS not doing enough to combat aggressive tax structures punted by some firms or advisors, as well as those frustrated by widespread and blatant poor service delivery, can now join ‘team SARS’,” it said.

More notably, Tax Consulting said that the panel will give SARS more teeth.

The appointed tax practitioners will be able to engage in taxpayer and trader communications, telephonically, by written correspondence, and through virtual meetings, and will be empowered to raise assessments, conduct audits, and even collect taxes due to SARS—fulfilling the revenue authority’s mandate.

According to Prof Keith Engel from the South African Institute of Taxation (SAIT), private sector experience allows a tax collector “to know where to look and how to ask the right questions”, which appears to be the angle for SARS.

“This latest initiative—by enlisting specialised tax consulting and compliance services from the private sector—means that taxpayers on the wrong side of the law will have a higher risk of detection and tax aggressive schemes will face even better technical scrutiny,” Tax Consulting said.

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