By any measure, the experiences with the South African tax collector – shared by readers online and on social media platforms – point to stressful, frustrating and boring interactions with SARS that left ordinary taxpayers floored. .
This is the overwhelming response to a personal reflection by this reporter on how, although a tax refund was paid after verification at the end of December 2021, a new “execution” followed in mid-February, with additional supporting documents to prove the validity of the receipts already submitted.
SARS’ approach to ordinary taxpayers of “guilty until proven guilty” raises concerns, especially in the absence of clear, public and quantified tax measures against alcohol, tobacco and other smugglers, politically connected entrepreneurs and beneficiaries of state capture.
Among the responses, a pensioner couple* told how a tax refund, paid at the end of December 2021 after a verification process, was followed by a request for payment of more than 9,000 rand.
Their request to SARS for reasons and details on why a tax refund was reversed to a tax request has yet to receive a response. Emails had to be written after it turned out to be impossible to register a dispute and file an appeal on the SARS system.
A medically interned civil servant* recounted how SARS, instead of issuing a refund, demanded payment of the pension received from the Government Employees Pension Fund (GEPF).
In a case related to a previously incomplete tax return, a claim was adjusted from R23,000 to R7,000 after correspondence with the SARS debt collection office – and after some previously missing information was provided to the tax collector taxes.
This particular taxpayer* did not know that information was missing; it only appeared now, with the request.
It’s all about approach. While the SARS method seems like taxpayers are guilty unless they prove otherwise, it could well, in the months and years to come, erode compliance and public goodwill, and boomerang the deterioration of socio-economic conditions in South Africa.
A series of detailed questions – including the impact of SARS’ attitude on public goodwill and tax action against State Capture recipients – were emailed to the tax collector on Thursday, February 24. Although the requested response deadline – end of Monday – was extended until Wednesday, March 2 at noon, no response had been received by 6 p.m.
But SARS Commissioner Edward Kieswetter is on Twitter regarding the original personal thought piece.
“It is regrettable that journalists take advantage of the privilege of their platform to air their personal tax affairs. I suggest this matter be handled privately to preserve taxpayer confidentiality and the integrity of the process,” he tweeted.
It is regrettable that journalists take advantage of the privilege of their platform to air their personal tax affairs. I suggest that this matter be handled privately to preserve taxpayer confidentiality and the integrity of the process. @dailymaverick @SARStax https://t.co/WvFKDg2fRE
— Edward Chr Kieswetter (@EdKieswetter) February 21, 2022
Readers and social media users had a different opinion, including lawyer Richard Spoor, who responded to the SARS Commissioner:
“Fact: you (SARS) spent 90% of your time harassing people who fill out their forms and jump through hoops for you. Prosecuting big criminal tax evaders is just a sideshow (Come over to this side and I’ll tell you some stories about it)…”
Also on this timeline, Twitter user Meepo complained, “I am now in my 3rd 21 day waiting period for a refund I was supposed to receive last year… Mr. Kieswetter, I think you are missing the plot.
This got a response from @SARStax requesting details be sent to [email protected]. It’s an email address often cited by Kieswetter when taxpayer issues pop up on his Twitter timeline.
The online responses included a Daily Maverick reader* recounting how, after waiting two hours to speak to a consultant, the promised corrected status update did not materialize.
“I believe in paying my taxes too, but come on SARS, you need to play your part too, stop harassing the middleman and target the real scammers.”
self-confessed”scrupulously honest provisional taxpayer, Daily Maverick Stalker reader*, was submitting the January tax return early and received a small refund – only to receive an administrative penalty of R2,000 for late submission. Although SARS acknowledged the error in a phone call, rectification could only be made through the dispute process.
“Suffice to say that this has also been extended!!! Eventually, I had the sentence overturned. However, all goodwill has long since evaporated.
A similar experience by another reader* gets stuck in the so-called rebate request process. “’Remission’ – what a way to describe the repair of an admitted mistake in SARS! I hate to think of how many hours searching the website and waiting on the phone I spent trying to fix a SARS error…”
A call to Daily Maverick Insiders to share their SARS experiences saw similar accounts of punishment for, ironically, submitting statements before the legal deadline. For one respondent, the 500 rand penalty “was not worth the dispute”.
Coincidentally, of the 171 responses to this call, less than 10 indicated that they had no problem. “I would like to congratulate SARS for their excellent work and the huge improvement in my personal tax filing experience” was the only positive comment.
Most recounted bullying, feeling targeted for repeat audits – even though previous audits found no irregularities – and tax demands dating back to 2014 and 2013, well beyond the five years taxpayers are required to file. keep their documents.
Repeated audits and checks, with repetitive requests for documents that increase administrative burdens, also emerge from readers’ responses to the personal reflection.
“I received my completion letter and notification that there were no changes to my assessment. Two days later I received, instead of my expected refund, a notification that I had been flagged for audit, with a new file number.
“It took almost four months for the process to be completed – still no change in the assessment,” according to a Daily Maverick reader* in an experience repeated by another reader running a small business. “The checks are over without finding anything and next month, same story.
Reader Love JHB South* commented on how SARS audited the same taxpayers, year after year, even if no anomaly was ever found.
“SARS needs to update their IT department as they continue to send ‘system driven’ letters which are incorrect… We need a big overhaul here, and more emails to customers with incorrect information.
“SARS needs to leave the soft targets already in their database and start adding wealthy, tax-free individuals and corporations.”
There is clear pressure on SARS to increase tax collections, given rising unemployment, hunger and poverty in South Africa – Covid lockdown restrictions hit day 707 on Thursday – and annual domestic debt servicing costs of over R308 billion.
This was pretty much clear from Budget Day on February 23, when Finance Minister Enoch Godongwana welcomed R181.9 billion in additional – and previously unexpected – tax revenue, but also warned that it could not be invoked because commodity price windfalls are temporary.
A few days later, Kieswetter said Business day how the efforts to combat SARS had contributed two-thirds to additional tax revenue, not just a commodity windfall or an overall economic recovery.
It’s an echo of what the tax boss also said to others, as the silver show.
And that meant tax compliance was now 64.5% down from 62%.
According to for business maverickSARS selected one in five personal tax returns for audit, leading to final claims in favor of the tax collector in about six out of 10 cases.
“This means that if we hadn’t followed the audit procedure, these taxpayers would have received refunds illegally,” Kieswetter said in an interview, later adding:
“Sometimes the process can take longer than 21 days, but preventing fraud and saving the country money justifies the work we do.”
Revamped SA Revenue Service attracts the big fish and focuses on the super-rich
This work included reinstating a high-value unit – a similar unit was removed when Tom Moyane was tax chief – with a view to looking beyond income to the overall wealth base, including home investments. both overseas and local, properties and such.
Although Kieswetter told reporters during the pre-budget speech briefing that progress was being made, also in corruption investigations, work in this direction could be “invisible”.
Some of that “invisible” became a bit more visible when, on February 26, the Hawks said in a statement that three men had appeared in the specialist Commercial Crimes Court in Pretoria for a VAT fraud of 10.2 million rand.
A day later, a statement from SARS announced the seizure of the assets of two diagnostic radiologists in relation to a tax debt of R52 million after their request for compromise was rejected, according to a media statement on SARS February 25.
Section 200 of the Tax Act allows SARS to “trade off”, in effect reducing debt owing, “in order to obtain the highest net return from the collection of tax debt”.
In that statement, Kieswetter said SARS wanted to make compliance easy and simple for taxpayers, giving them clarity and certainty about obligations.
“We view the overwhelming majority of taxpayers as honest and willing to comply…However, willful and criminal non-compliance from any source will not be tolerated. SARS will use every legal instrument at its disposal to make it difficult and costly for these taxpayers and traders. »
However, judging by accounts from readers and social media users, ordinary taxpayers are more likely to have the tax collector throw the book at them. Tax compliance doesn’t matter. DM
* The identities of readers and others are known, but masked to avoid unintended consequences.