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Business shouldn't be abused to boost SARS' figures - DA

Mar 21 2017 16:44
Liesl Peyper

Cape Town – The South African Revenue Service (SARS) appears to be abusing aspects of tax laws that allow for extended time for audits, documents and other delaying tactics, said Alf Lees from the Democratic Alliance. 

His comments came after the announcement that Judge Bernard Ngoepe, Tax Ombud, will launch an investigation into “systemic problems” at SARS and the reason for the widespread delays in the payment of refunds. 

READ: Tax ombud gets nod to investigate SARS

“Tom Moyane (SARS commissioner) was adamant that there are no problems with the various types of tax refunds and that SARS was in fact paying refunds promptly,” Lees said. 

“But this has been contradicted by the exceptionally high number of calls to the DA and to professional accounting bodies for assistance from taxpayers who have not received refunds promptly.” 

Lees said tax refund delays include value-added tax (VAT), income tax, employee tax incentives and diesel refunds that are causing considerable distresses to businesses, especially small enterprises. 

"No money from business, especially small businesses, should be abused to assist the government's cash flow, or to assist SARS to achieve revenue collections," Lees said with reference to reports that SARS is withholding tax refunds in order to boost its tax collection figures - an allegation SARS has denied. 

READ: Revenue drop necessitates tax law changes - Treasury

According to Lees, complaining taxpayers express “great frustration” that SARS simply fail to keep them informed. In addition, SARS request the same supporting documentation repeatedly. 

“SARS staff by and large appear to be restricted by using pro forma, poorly drafted letters to communicate with taxpayers.” 

Lees opined that there’s a crisis developing inside SARS. 

“Under the leadership of Commissioner Moyane it seems a climate of low morale, divisions and weak management has developed that is impeding the collection of revenue. 

READ: Something is rotten in RSA, cautions tax ombud 

“Add to that the failure of the Commissioner and senior management to ensure that technology skills are developed and retained and that systems are updated and developed,” Lees said.  

The SARS investigation follows after legislative amendments allowed the Office of the Tax Ombudsman to be more independent of the Revenue Service. 

READ: Tax bill proposals to give ombud more teeth 

The investigation will include the delays in paying out tax refunds to individuals and companies, following numerous complaints from individuals and businesses. 

At a media conference ahead of his 2017 Budget Speech, Finance Minister Pravin Gordhan expressed concern over SARS’ revenue collection, which recorded a shortfall of more than R30bn – the largest revenue deficit in eight years. 

Responding to the news of the investigation, SARS on Monday pledged full cooperation and assistance. The Revenue Service maintains that its systems and processes are “robust”. 

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