6 December<\/a> <\/strong>last year, Neil Hobbs, the CEO of tax advisor firm Hobbs Sinclair said that there was an increase where SARS was taking monies directly out of taxpayers’ bank accounts to collect taxes due.<\/p>\nThere had also been an uptick in SARS requests for clients to justify expenses by providing supporting documentation.<\/p>\n
Tax Consulting said that revenue service is now becoming more aggressive, and its ‘mercy’ towards indebted taxpayers is wearing thin.<\/p>\n
“Over the last two years, many South Africans were placed in a difficult position \u2013 be compliant in terms of taxes, or give a lifeline to the businesses they had built through blood, sweat, and tears.”<\/p>\n
“SARS has shown great empathy in these situations and has historically been quite amicable in aiding these taxpayers. However, this mercy is quickly running out with indebted taxpayers,” the group said.<\/p>\n
At the same time, the revenue service is also ramping up its compliance mechanisms with more aggressive audits and verifications of taxpayer returns and additional scrutiny now faced on intra-group loans.<\/p>\n
“SARS has drastically increased the number of letters of final demand issued to non-compliant taxpayers,” added the firm.<\/p>\n
This has, however, caused a headache for some business owners that, even post-demand, chose to adopt a ‘head-in-the-sand’ approach when it comes to their tax compliance status, ignoring the dire consequences.<\/p>\n
This approach adds fuel to the fire for taxpayers as they then find themselves unable to submit tenders to attract vital new business opportunities because they cannot obtain a Tax Compliance Status pin, said the firm.<\/p>\n
“As a result of these difficulties, many businesses find their cash flow and very survival threatened, as they are unable to secure new streams of income to repay their existing tax debts,” said Tax Consulting SA.<\/p>\n
Recent data from both SARS and the National Treasury show evidence of a more determined tax authority.<\/p>\n
The latest 2022 Tax Statistic report showed increased tax revenue across all types, particularly in corporate income tax and domestic taxes on goods and services.<\/p>\n
The total tax revenue collected by SARS grew from R1.2 trillion in 2017\/18 to R1.56 trillion in 2021\/22, with a CAGR of 6.5%. However, this growth rate was lower than the 8.4% CAGR achieved in the previous five-year period from 2012\/13 to 2017\/18.<\/p>\n
In light of these results, finance minister Enoch Godongwana said there would be no additional or increased tax implementations for the coming fiscal period.<\/p>\n
Although SARS has adopted a more aggressive stance against non-compliance, the commissioner of the institution, Edward Kieswetter, said that it is trying to make compliance as easy as possible – and non-compliance costly.<\/p>\n
“In line with this strategic goal, SARS has afforded taxpayers the opportunity to become compliant by utilizing the debt relief mechanisms in the Tax Administration Act,” said Tax Consulting SA.<\/p>\n
“These debt relief mechanisms include a Deferral of Payment arrangement, where a tax debt is repaid in instalments or a Compromise of Tax Debt, where a portion of a tax debt is written off,” it added.<\/p>\n
If a business successfully concludes either of the two arrangments, they can apply for a tax compliance status pin regardless of their debt – increasing the likelihood of finding more business opportunities.<\/p>\n
\nRead:<\/strong> This is the average value of a house for South Africa’s millionaire ministers<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"The tax authority is digging deeper into the affairs of non-complaint taxpayers.<\/p>\n","protected":false},"author":10,"featured_media":736439,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[26,12796],"class_list":["post-671125","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline","tag-tax-consulting-sa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/671125","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=671125"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/671125\/revisions"}],"predecessor-version":[{"id":736459,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/671125\/revisions\/736459"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/736439"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=671125"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=671125"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=671125"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}