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Acting Sars Commissioner has ‘sleepless nights’ about tax target

An ambitious tax revenue target … and taxpayers who choose to pay penalties rather than file returns.

The acting commissioner of the South African Revenue Service (Sars) is having sleepless nights about the ambitious tax revenue target he has to meet in the current financial year.

The target of R1 345 billion is more than 10% higher than the preliminary amount Sars collected in 2017/18 and will have to be raised during a period of low economic growth and as the Nugent Commission of Inquiry continues its probe into tax administration and governance problems at Sars.

“The [tax revenue target of] 13-45 [billion rand] is giving me sleepless nights,” said Mark Kingon at the launch of Tax Season 2018. Filing season, which is 18 business days shorter than usual, officially started on July 1. Most individual taxpayers will have to file their returns by October 31.

Read: 8 things you need to know about tax season

Kingon said that while there were various efforts under way to ensure Sars reached the target, it was not something he could guarantee.

Finance minister Nhlanhla Nene said he is confident that Sars will be able to reach the target. National Treasury understands the problems facing the economy, but improved efficiency, compliance and integrity of the system could go a long way in overcoming the tax gap.

Sars is working to restore public trust and credibility after a turbulent period during which the Tax Ombud found that it unduly delayed refunds in certain cases. The revenue authority has also been accused of aiding the state capture project and commissioner Tom Moyane has been suspended amid allegations that public trust suffered under his leadership.

Kingon said confidence in the tax system had an impact on revenue collection.

In April, Sars engaged with 14 000 Vat vendors who chose not to pay taxes worth over R1 billion.

“Now that type of behaviour has a significant impact into us being able to achieve the 13-45 [billion rand tax revenue target].”

Kingon said chief officers had been working together to identify similar cases and to call vendors and employers immediately should they fail to make payments.

Although it’s still early days – the first quarter of the financial year has just ended – Sars is already trying to identify revenue gaps.

“Company income tax I have got concerns [about] specifically,” Kingon said.

Sars is also looking at the impact of the one percentage point adjustment in Vat, and how other policy changes might affect the revenue target.

The acting commissioner warned that Sars would continue to issue penalties for late submission of returns and that perpetrators would ultimately be prosecuted. There are still cases where taxpayers who haven’t submitted returns for up to 37 months choose to pay a penalty rather than file a late return.

“One just wonders what people are hiding in those tax returns … We have to start prosecuting people who just wilfully continue to disobey the laws of the land. No matter what excuses can be advanced, to not file a return for 37 months is a shame.”

Kingon added that a significant portion of Sars’s debt figures relate to administrative penalties and non-submission of returns. A meaningful number of people simply choose to ignore their obligations.

Many people are operating below the radar. Against this background, Sars has launched a specific initiative aimed at “prominent business individuals” who may have up to 200 different entities in their stable – trusts, companies and individuals – and where it has identified “non-compliance on a grand scale”.

Kingon said the chief officer of enforcement, Mogola Makola, is currently reconstituting teams to deal with the broader illicit economy, which includes the tobacco trade.

“You need a specific mindset to be able to dig out the criminal activity that is being conducted with the sole focus of defrauding the fiscus,” he said. “We cannot allow it to continue.”

Kingon also launched the long-awaited Service Charter, which sets out the minimum levels of service and turnaround times taxpayers can expect.

The previous charter, which was issued around 2007, has effectively been non-operational since Sars moved from manual to electronic business processes.

In terms of the charter, the Sars Contact Centre will endeavour to answer calls within four minutes during peak seasons (such as tax season) and one minute during off-peak seasons. Further, Sars aims to pay refunds above R100 for the current filing period within seven business days of finalising the final assessment (provided no other debt is outstanding, all obligations have been met, administrative control processes are adhered to, and no inspection, verification or audit is required or has been initiated).

Kingon said Sars is committed to the timelines, but in certain cases it might not be able to adhere to them due to capacity constraints. Early on Monday, roughly 800 people were standing in line at its Vereeniging branch.

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“In April, Sars engaged with 14 000 Vat vendors who chose not to pay taxes worth over R1 billion.”

I’d do the same if I was a VAT vendor getting my payments delayed by SARS.

Absolutely sickening.

How much South African Tax money is stashed in Dubai?

Apparently Mr. Zuma has a 16 bedroom house in Dubai?
If true, how did he pay for it?

What are the Tax authorities in Dubai doing about it?

Shame poor guy…
JZ and the ANC created this chaos and now it’s up to some white guy to fix the mess!
Some things never change in this country.
My opinion only.

His appointment is only temporary. Once he sorts out the mess he will be replaced by a cadre.

My thoughts exactly.

SARS is the point of collection for a multitude of criminal government looters who steal our money. Nobody gets prosecuted. There should be a tax revolt. It looks like it has started.

I have been waiting for 2 months for a basic refund and sars are employing 1 delaying tactic after another.Sars has already turned against their good citizens…they will only increase this tactic further

Agree. SARS only purpose is to make life as difficult and bureaucratic as possible for taxpayers. Any problem with efiling is a nightmare and the staff at branches are arrogant,lazy and incompetent.

I am glad that Mr Klingon will have sleepless nights. I had sleepless nights for exactly 4 months earlier this year when SARS accepted every cent of my declared business income, but disallowed every cent of my business expenditure, resulting in an additional income tax assessment of R583 000, which would have literally closed the doors of my business if I had to pay same.

Becoming a common practice. Wait until they start taking money out off you bank account without reason.

So many small business people are now sweeping their bank accounts or operating deliberately in overdraft to avoid such raids … totally unethical.

Tax man forces me to complete returns in a language other than my home language.When I made a simple language mistake he willy-nilly added R100000 to my taxable income and all efforts to rectify it has been unsuccessful. And then they want to know why the tax payer does not want to play ball.

I don’t blame Kingon but the reality is that it is going to take a long time to build confidence in government again.

Perhaps a start would be to investigate corrupt officials tax practices, recoup some cash there. Couple of lifestyle audits at SARS wouldn’t go amiss as well.

I pay my taxes on time and with transparency every year. Can’t say I am happy paying probably an effective tax rate of close to 60% (VAT, income tax, CGT, transfer duties, fuel levies, dividends tax etc) and then still being threatened for any land I own, being subject to racist politics and threats and also having to pay for private health, education, security etc because none of that is provided at a reasonable level by Government.

Why don’t SARS bring the millions of mini-bus taxi’s into the tax net through new licencing and payment apps?

As that is how you alienate voters… Taxi fares up, votes down. They just want to stay in power, all its about…

I agree yeboBru….but thinking about it, with dwindling taxpayers , a point will be reached where Govt wont be able to pay salaries, grants, social pensions. Or paid every 2nd month *lol*. THAT’s when all voters will be alienated.

An ambitious tax revenue target. I would say ambitious is not the word. Like Star Trek we have more fantasy than reality. When adrift in deep space it makes some kind of perverse sense to engage a Klingon to do the job that no human being can, but the reality is the tax base is collapsing as tax payers, bled dry, externalise their wealth and themselves.

The problem with SARS is that they have lost any moral high ground that they may have pretended to once have. They used to speak of “social contracts” and “tax morality” the silken glove hiding the iron fist. No longer for the extortion arm of the ANC regime: It is enforcement and prosecution. Unless you are ANC, of course.

One has to laugh: “We have to start prosecuting people who just wilfully continue to disobey the laws of the land”. Last time I looked misappropriation, theft of public funds and fraud were also criminal offences- unless you are ANC. When you pay tax, your tax money is going to be stolen in a large part one way or another by the ANC regime, their mandarins or their minions. The ANC have applied their ethnic cleansing to the workplace, to the government and now they are doing this to land ownership. This is the regime to which you are supposed to be beholden with some sort of patriotic duty. What a joke. Get that log out of your eye first, Zacchaeus.

The pressure on SARS to collect enough money from a couple of taxpayers in a third world country to pay for free education, free housing and free healthcare, coupled with vast corruption and mismanagement, must be UNBEARABLE !!!

…”No matter what excuses can be advanced, to not file a return for 37 months is a shame”

You, and your ilk sir, ARE the shame.

Sod off.

They want to collect so much and they are under pressure to do so, on the other hand they are not creating an economy that would allow them to have no pressure. An economy that actually creates (or want to) jobs and empowers,funds and support business.

This sad story was predictable. Slowly but surely, civil disobedience brought on by the machinations of the current government, will destroy everything. The struggle hero’s have zero foresight and economic intellect. Sad to witness the demise of a country that was once the powerhouse of economies on this continent.

Proof that the ANC-regime has NO BALLS: to improve tax collection via increased economic activity/growth, the Govt needs to REDUCE income tax levels way down…..like 15% or 20% for Individuals, and 15% company tax. No CGT, wealth or inheritance tax.

Just like the “low tax countries” on this globe….and boy, are they booming. I wonder why??

It is every citizen’s duty to pay as little tax as possible.

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