SARS goes after taxpayer who owes R0.49
SARS is getting desperate after suffering huge shortfalls, and is now auditing a large portion of taxpayers who need to receive refunds. This is according to the Rapport newspaper, which spoke to tax practitioners about changes at the revenue service. According to the newspaper, more salary earners are subjected to audits – while SARS takes longer to process refunds.
Tax practitioners argue this is a strategy by SARS aimed at “winning time”, following the huge tax shortfall. Tax revenue is projected to fall short of the 2017 budget estimate by R50.8 billion in the current year – the largest under-collection since the 2009 recession. This has pushed SARS to engage in “bully tactics”, with between 80%-90% of its salary earning clients now getting audited.
This is up from just 20% previously. SARS is reportedly asking for basic documents, which are easily supplied, but it is buying time before distributing refunds.
In one case covered by the report, SARS is going after a taxpayer who owes it 49c. The revenue service is also applying penalties of 10% for any late payments, even if they are late by one day.
These tactics, in combination with the reported corruption under the current government, have raised concerns a tax revolt may be brewing in South Africa.
“Behavioural responses to tax increases may be larger than anticipated and revenue could perform below expectations even if taxes are hiked,” said Finance Minister Malusi Gigaba.
“Compliance concerns are mounting in the context of tax administration challenges and weakening tax morality.”