Most taxpayers find themselves on edge when submitting their returns for the current tax-filing season, and the reason for the underlying tension could have a lot to do with how they perceive SARS, says Andr\u00e9 Daniels, tax attorney at Tax Consulting SA.<\/p>\n
Daniels said that taxpayers are shocked when they receive a final letter of demand or when they notice that they have a tax debt owing to SARS.<\/p>\n
“They are often surprised how quickly matters escalate into a formal or legal matter.<\/p>\n
“Most disputes originate when errors occur through taxpayers accepting SARS\u2019 auto-assessments on the e-Filing platform without ensuring the correctness thereof, or when individuals make a simple miscalculation on their returns.”<\/p>\n
However, by following the correct procedures, this type of dispute can easily be resolved without incurring additional charges, Daniels said.<\/p>\n
“More complex disputes could be resultant from intricate business engagements, working abroad and earning a foreign currency, complicated estates and trusts, or the implementation of new rules or adjustments to the relevant tax acts.<\/p>\n
“No matter the nature of the dispute, it is imperative to seek professional advice before engaging SARS in the dispute process, towards alternative dispute resolution, or a mutually beneficial compromise arrangement.”<\/p>\n
Not out to take your money\u00a0<\/strong><\/p>\n “In 2020, the South African Revenue Service (SARS) raised 4.34 million personal income tax returns, resulting in more than 520,000 (12%) objections,” said Daniels.<\/p>\n “Over the years, South Africans have become convinced that SARS\u2019 sole purpose is to take their money.<\/p>\n “This, obviously, is done through excessive taxation, or by means of penalties when they are found to be non-compliant – but is that really the case? Is SARS really the terrible institution we are led to believe it is?”<\/p>\n Despite the negativity in the market, SARS, for the most part, is complying with its obligations in terms of the Tax Administration Act, Daniels said.<\/p>\n “Individuals on the cusp of a tax dispute with SARS, or facing litigation in Tax Court, might not have a favourable attitude towards the revenue authority.<\/p>\n “What must be considered in every unique situation, is how the matter became a dispute,” he said.<\/p>\n
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