Authors: Andrew Wellsted and Rivalani Mutshinya (NortonRoseFulbright) A recent appeal case South African Revenue Service v Pretoria East Motors (Pty) Ltd, sets out the standard that SARS is expected to uphold when auditing taxpayers. SARS must try to understand the systems used by taxpayers before raising additional assessments and imposing penalties for incorrect tax treatment. The court criticised SARS for employing bullying tactics when dealing with taxpayers.
Category: Tax Returns
State wants tax consultant's bail revoked
The State asked the Cape Town Magistrate’s Court on Tuesday to revoke bail granted to a tax consultant accused of fraudulently claiming tax refunds. Heide Jasmine was accused of filing false claims for refunds amounting to R80 847, based on false medical expenses, since she was released on bail.
SARS extends list of non-resident persons having to file an income tax return
On 25 June 2014 SARS issued its annual notice (‘Notice’) to specify which persons must file income tax returns for the 2014 year of assessment. The Notice was issued in terms of section 66 of the Income Tax Act (the ‘Act’), read together with section 25 of the Tax Administration Act. The 2014 year of assessment generally runs from 1 March 2013 to 28 February 2014.
Sars to focus on certain areas this tax season
The South African Revenue Service (Sars) will pay particular attention this season on medical aid claims, retirement fund contributions, income protection policy contributions and taxpayers who submit revised returns for previous years. This is according to acting Sars commissioner Ivan Pillay. “We are doing this deliberately. We are telling you up front. We don’t want to catch you out. We’re saying don’t go there,” he said.
Noose tightens on tax dodgers
Author: Philani Nombembe (Times Live) Dodgy tax consultants are hitting the SA Revenue Service hard with more than R80-million in fraudulent claims filed during the past financial year. This week the Cape Town Regional Court sentenced tax practitioner Zaida Johaar to four years in prison for income tax fraud. The hefty sentence, despite Johaar being a first offender, underlines the new severity with which tax fraud is regarded.
Launch of 2014 Tax Season
The South African Revenue Service (SARS) launches the 2014 Tax Season. This annual campaign has evolved into an important partnership between government and taxpayers who make a vital contribution to our country’s tax system.
Understatement Penalties in hindsight
Some 20 months after the introduction of Understatement Penalties, it is worth taking stock of where taxpayers find themselves following their introduction, and highlighting some of the challenges they are experiencing. Many taxpayers have become all too familiar with this Understatement Penalty Percentage Table (fig. 1 below) contained in section 223 of the Tax Administration Act No 28 of 2011 (“the TAA”), which was mercifully amended earlier this year by the reduction of some of the penalty percentages:
SARS targets R1 trillion in tax collections
The SA Revenue Service intends collecting nearly R1 trillion during the 2014/15 tax season, which began on Tuesday. Tax revenue was expected to grow by 10.4% to R993.6 billion, with R899.8 billion collected last year, after refunds, Finance Minister Nhlanhla Nene told reporters in Pretoria. Nene said Sars’s ability to collect revenue had been one of the cornerstones of South Africa’s 20-year-old democracy as it affected government’s ability to deliver public services.
SARS filing season tips
Tax Season starts 1 July and for eFilers the process is even easier this year. Here are a few tips that will help you complete and submit your return easily, honestly and on time:
Deductibility of audit fees
Author: Beric Croome (Tax ENSight) On 7th March 2014 the Supreme Court of Appeal delivered judgment in the as yet unreported case of Commissioner for the South African Revenue Service v Mobile Telephone Networks Holdings (Pty) Ltd, (966/2012) [2014] ZASCA 4 (7 March 2014) which dealt with the deductibility of audit fees incurred for a dual or mixed purpose and the apportionment thereof for tax purposes in the light of section 11(a) of the Income Tax Act 58 of 1962, as amended (‘the Act’) read with sections 23(f) and 23(g) of the Act.