SARS is chasing down tax delinquency and South Africans can face serious consequences, such as fines and jail time!
The South African Revenue Service (SARS) is cracking down on tax delinquency, and non-compliance, which can lead to serious consequences, such as fines and even jail time. If you’re a South African taxpayer, it’s crucial to understand your tax obligations and ensure you’re filing accurate and complete returns in order to avoid these scenarios.
A recent case in the Johannesburg High Court serves as a stark warning, exemplifying SARS’s zero-tolerance approach to tax offenses. A VAT fraud syndicate was sentenced to a combined 205 years in prison, with individual sentences ranging from 5 to 65 years. The fraudulent claims amounted to over R200 million.
Tax Consulting SA emphasizes the increasing number of criminal convictions secured by SARS in recent years. These convictions stem from lifestyle audits, fraudulent tax return submissions, and other “serious tax offenses” – that can be defined by the Tax Administration Act, 28 of 2011 as:
“Serious tax offence means a tax offence for which a person may be liable on conviction to imprisonment for a period exceeding two years without the option of a fine or to a fine exceeding the equivalent amount of a fine under the Adjustment of Fines Act, 1991 (Act 101 of 1991).”
This significant rise in successful prosecutions is a result of the collaboration between SARS and the National Prosecuting Authority (NPA). Penalties for individuals and companies range from fines that can drain your accounts to lengthy prison sentences.
Aggressive Crusade On Non-Compliance
SARS Commissioner Edward Kieswetter emphasizes their commitment to making tax compliance easy and seamless for taxpayers when they transact with the organissation. However, for the non-compliant, the tendency is to make life very difficult and costly, as they are amping up its collection efforts. They’re implementing various aggressive tactics to recover outstanding tax debts, including:
- Salary Garnishments: this means your employer is legally obligated to withhold a portion of your salary to settle your tax debt;
- Sheriff Callouts: SARS can authorize the sheriff to seize your assets to settle the debt;
- Direct Debits From Accounts: SARS can take money directly from your business or personal accounts to recover the owed amount.
Avoiding Non-Compliance
- Familiarize yourself with the tax types applicable to you (e.g., income tax, VAT) and the deadlines for filing returns;
- Keep meticulous records of your income, expenses, and deductions. This will make filing your returns much easier and more accurate;
- File your returns on time. Missing deadlines can result in penalties;
- If you have complex tax affairs, consider seeking guidance from a registered tax practitioner or accountant;
- Avoid late payment penalties by settling your tax debts by the due date.
Here are some helpful resources from SARS:
- SARS website: https://www.sars.gov.za/
- SARS eFiling portal: https://www.sarsefiling.co.za/
- SARS Contact Centre: 0800 00 7277
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