Last year, SARS collected R12-billion less than its initial target.
New regulations to gather more “intelligence” from third parties are set to pull the noose tighter around tax-evaders and those who simply keep sloppy records.
People and companies with whom you do business, such as your lawyer, estate agent and medical fund, now have a duty to automatically submit information about you to SARS.
These powers were gazetted last month and follow provisions in last year’s Tax Administration Act that allow certain high-ranking SARS officials to authorise searching without a warrant.
“Ask anyone in the industry and they will tell you SARS is much more aggressive,” said Ettiene Retief, chairman of the national tax committee at the South African Institute of Professional Accountants.
“One of the biggest changes in the new Tax Administration Act is the broadening of the scope of the information that SARS can request,” he said.
This would include rental and investment income, interest payments, royalties, the proceeds of the sale of financial instruments, retirement income contributions, life insurance payouts and medical aid contributions.
Though these have to be filled in on an individual tax return, it was not easy to verify whether the taxpayer entered the correct numbers.
Where SARS had to request specific information relating to a particular taxpayer before, Retief said: “Now they can use ‘general specificity’ to request more general information; for example, a bank might be requested to submit a list of all SA residents with a balance in excess of a certain amount.”
SARS spokesman Adrian Lackay yesterday confirmed this.
“SARS can request any information from a bank account of a taxpayer as part of its third-party data verification,” he said.
He played down suggestions that it was aggressive and that changes to legislation and regulations were severe, calling it “evolutionary, rather than revolutionary”.
But SARS was “more focused”, said SA Institute of Tax Practitioners CEO Stiaan Klue.
The taxman wa s increasingly using intelligence it had gathered through more than half a decade of eFiling to aggressively patch the holes in the tax net, said Klue.
Not only that, it also used a more direct approach and was going “for low-hanging fruit”, said Klue.
SARS and the National Treasury last week also showed their intention to spoil the multinationals’ party with proposed limits on tax deductions for interest.
“The reality is that the fiscus is under pressure to collect money,” said Retief.
The billions SARS collected below its initial target last year left South Africa with a budget deficit of 5.1%, according to the preliminary outcome for revenue collection released by SARS last month.
Finance Minister Pravin Gordhan said last month he anticipated the consolidated deficit to come in below 5%, piling on the pressure to get more money in.