South Africa launches tax crackdown South Africa launches tax crackdown

South Africa launches tax crackdown
25 Apr 2018

Taxpayers who fail to submit their returns are being prosecuted in a crackdown led by the South African Revenue Service (SARS) and National Prosecuting Authority (NPA).

According to SARS‚ there has been an “unacceptable increase in the non-submission of returns across all tax types”, including Pay As You Earn (PAYE)‚ Value-Added Tax (VAT)‚ corporate income and personal income tax, over recent years. Finance minister Nhlanhla Nene said recently that SARS had collected ZAR1.216 trillion (US$101 million) for 2017-18, slightly less than the amount targeted.

The tax authority said the new crackdown was intended to prosecute “non-compliant taxpayers‚ including prominent South Africans‚ who have failed to submit returns. Taxpayers who are found guilty will end up with a criminal record”.

The initiative resulted in one businessman paying an admission of guilt fine of ZAR5‚600 (US$466) in the Port Shepstone Regional Court last week for failing to submit more than 50 outstanding VAT, PAYE and Corporate Income Tax (CIT) returns. Cases involving hundreds more outstanding returns are still being heard.

Acting SARS spokesman Sicelo Mkosi said: "The decision to resort to enforcement of compliance through criminal prosecution is a last resort. All the taxpayers that will appear in court were engaged beforehand and final demands were issued to them before the criminal cases commenced.”

According to Times Live36 dockets instigating legal action have now been passed over to the NPA.

"The significant drop in the submission of returns was one of the key indicators pointing to decreased compliance, and was highlighted by finance minister Nhlanhla Nene during the announcement of the tax revenue collection figures for the 2017/2018 financial year," Mkosi added.

Emma

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

Taxpayers who fail to submit their returns are being prosecuted in a crackdown led by the South African Revenue Service (SARS) and National Prosecuting Authority (NPA).

According to SARS‚ there has been an “unacceptable increase in the non-submission of returns across all tax types”, including Pay As You Earn (PAYE)‚ Value-Added Tax (VAT)‚ corporate income and personal income tax, over recent years. Finance minister Nhlanhla Nene said recently that SARS had collected ZAR1.216 trillion (US$101 million) for 2017-18, slightly less than the amount targeted.

The tax authority said the new crackdown was intended to prosecute “non-compliant taxpayers‚ including prominent South Africans‚ who have failed to submit returns. Taxpayers who are found guilty will end up with a criminal record”.

The initiative resulted in one businessman paying an admission of guilt fine of ZAR5‚600 (US$466) in the Port Shepstone Regional Court last week for failing to submit more than 50 outstanding VAT, PAYE and Corporate Income Tax (CIT) returns. Cases involving hundreds more outstanding returns are still being heard.

Acting SARS spokesman Sicelo Mkosi said: "The decision to resort to enforcement of compliance through criminal prosecution is a last resort. All the taxpayers that will appear in court were engaged beforehand and final demands were issued to them before the criminal cases commenced.”

According to Times Live36 dockets instigating legal action have now been passed over to the NPA.

"The significant drop in the submission of returns was one of the key indicators pointing to decreased compliance, and was highlighted by finance minister Nhlanhla Nene during the announcement of the tax revenue collection figures for the 2017/2018 financial year," Mkosi added.

Emma

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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