Times have certainly changed. Ten years ago a tax query from a SARS assessor would find its way to the desk of the financial director or in-house tax advisor who would send it off to their auditors. The auditors would, in turn, give it to their tax department who would draft a reply to SARS and hope the matter went away. If not, an informal meeting between the financial director and tax advisor at the audit firm would usually settle the dispute.
Category: Tax Administration
Tax collection remains buoyant
Finance Minister Pravin Gordhan says tax revenue remains “buoyant” despite a global economic turmoil that has tested South Africa’s finances. Announcing the preliminary outcomes of revenue collection for the 2013/14 fiscal year, Gordhan said the overall revenue collected by SA Revenue Service as of midnight on Monday March 31, was R899.7bn. This is R0.7bn more than the revised estimate in the 2014 Budget.
Minister Gordhan Officially Launches Tax Ombud’s Office
Pretoria 7 April 2014 – The Minister of Finance Pravin Gordhan today (7 April 2014) officially launched the SA Tax Ombud whose objective is to review and address complaints by taxpayers regarding service, procedural or administrative issues relating to their dealings with the SA Revenue of Service (SARS). As announced in October 2013, retired Judge Bernard Ngoepe is the Tax Ombud.
Challenging a refusal by SARS to grant or renew a tax clearance certificate
Taxpayers who wish to tender for State contracts do not qualify unless they can produce a current tax clearance certificate. The refusal, withdrawal or non-renewal of such a certificate would consequently be the death knell of any business whose lifeblood is the securing of state tenders. A taxpayer’s unsuccessful attempt to compel SARS to grant a tax clearance certificate The decision in Chittenden NO v CSARS [2014] ZAGPPHC 51, handed down by the Pretoria High Court on 18 February 2014, concerned a taxpayer company that was under supervision in terms of the business rescue provisions of the Companies Act 71 of 2008 and its attempt to secure the renewal of a tax clearance certificate.
New page on the institution of legal proceedings
Author: SARS Legal and Policy What is it? The institution of legal proceedings is a process whereby a taxpayer delivers court papers to SARS requiring the Commissioner for SARS to appear and defend a matter in the High Court. Prior notice before the institution of the proceedings is required in some instances, particular in matters involving the State. What does the tax and customs laws say? There are two different Acts in terms of which the institution of legal proceedings against the Commissioner for SARS is governed and although they have a similar purpose, the requirements are not identical.
Unreported tax case judgment with case number: SARS 4/2013
Author: Caroline Rogers and Megan McCormack of ENSafrica In an unreported decision, Jen-Chih Huang and 13 others v Commissioner of SARS and others with case number: SARS 4/2013 and dated 18 November 2013 (“the Unreported Judgement”), Tuchten J of the North Gauteng High Court handed down an important judgment in relation to information and documentation obtained by the South African Revenue Service (“SARS”) in terms of Part D of the Tax Administration Act No. 28 of 2011 (“the TAA”).
Tax Administration Act – Understatement penalty changes
Current provisions of the Tax Administration Act The Tax Administration Act No. 28 of 2011 (the TAA) became effective on 1 October 2012 and introduced the understatement penalty regime. In terms of section 222 of the TAA, a taxpayer must pay an understatement penalty in addition to the tax payable for the relevant tax period in the event of an “understatement”. What constitutes an “understatement”? An “understatement” is defined as any prejudice to the South African Revenue Service (SARS) or the fiscus in respect of a tax period as a result of:
SARS shortens time between date of assessment and 'second date'
In order to avoid interest on the late payment of assessed income tax, taxpayers have to pay outstanding tax by the ‘second date’ indicated on the income tax assessment. We are finding that SARS has shortened the number of days between the date of assessment and the second date in many cases, to only a few days. If your income tax calculation indicated that you will have to make a payment to SARS, please be aware that you may have to make the payment within a few days of submission of your return, in order to avoid interest.
An amendment to the Tax Administration Act: grounds on which an assessment can be withdrawn
An amendment to the Tax Administration Act expands the grounds on which an assessment can be withdrawn Author: PwC If a taxpayer incurs a tax debt that he is unable to pay, Chapter 14 of the Tax Administration Act 28 of 2011 makes provision for him to apply to the South African Revenue Service (SARS) for the debt to be written off or compromised, that is to say, partially written off. However, SARS is in the business of collecting tax, not of waiving the payment of tax. It will only write off a tax debt if it is in its own interests to do so, for example because it would be impossible or uneconomic to collect the debt. The fact that the taxpayer would suffer hardship if he had to pay the tax debt is a total irrelevance in this regard, and is not a factor that SARS takes into consideration.
SARS eyes R10bn from tax evaders
Author: Jacques Pauw (City Press) The SA Revenue Service’s (Sars’) special investigations unit has in the past 10 years recovered, or is busy retrieving, an estimated R10bn in unpaid taxes from South Africa’s most notorious gangsters and tax evaders. Among their scalps is Economic Freedom Fighters (EFF) leader Julius Malema, Ponzi supremo Barry Tannenbaum and the who’s who of the underworld: Radovan Krejcir, Glenn Agliotti, Cyril Beeka, Lolly Jackson and Colin Stansfield. The men and women of Sars’ Tax and Customs Enforcement Investigations unit (TCEI) comprise old Sars hands and young graduates, with a sprinkling of former Scorpions, Hawks, police crime intelligence and National Intelligence Agency officers.