The South African Revenue Service aims to penalise as many as 300,000 companies for failing to submit corporate income tax returns, the City Press reported.<\/p>\n
SARS has missed its tax collection target already this year, while at the recent Nugent commission of inquiry into governance and administration at the tax body heard from National Treasury that the April VAT hike to 15%, which has put pressure on both consumers and producers, was partly blamed on the SARS\u2019s inability to collect taxes under commissioner Tom Moyane.<\/p>\n
“We are at a stage now where we are relatively comfortable, based on the work we have been doing with the Companies and Intellectual Property Commission, that our register is in good nick and we can start imposing penalties,\u201d acting SARS chief officer for business and individual tax, Fabian Murray, told City Press.<\/p>\n
“The system development has been taking place and it will go live on December 7. We have done the numbers \u2013 we understand exactly who the corporates are that we will issue with penalties.”<\/p>\n
It said that approximately 500,000 new companies were registered yearly, and \u201cthe vast majority yield nothing\u201d, citing acting Sars commissioner Mark Kingon.<\/p>\n
Suspended SARS commissioner Moyane has been accused of abusing his power as commissioner and disrupting workflows at the revenue service. Among the claims is that he shut down vital units needed to ensure tax collection, and restructured the group without proper consultation.<\/p>\n
Treasury director-general Dondo Mogajane recently said that the VAT hike had to be implemented in order for Treasury to raise R25 billion, which would not have been necessary had SARS not been mismanaged to a point that it had a R50 billion shortfall.<\/p>\n
Sugar Ntwampe, a tax expert at the SA Institute of Professional Accountants, told City Press this week that the revenue service’s turnaround times weren\u2019t being followed.<\/p>\n
\u201cThis has been a very dark time for us because we have seen money that has been collected from taxpayers being spent the way it was. There was no consequence management. Anything went. No one was being held responsible for money that was being spent,\u201d Ntwampe said.<\/p>\n
\u201cThere have to be control measures. Measures that will make sure that this money is not just spent the way it is. The way it is now \u2013 we think there is nothing in place. There are no control measures in place.\u201d<\/p>\n
And according to Kyle Mandy, a partner and head of national tax technical at PwC, it could take up to five years to rebuild the tax body.<\/p>\n