Most Read Contributor in South Africa, September 2016
Imminent new tax laws geared towards improving SA's
revenue collection numbers will give the South African Revenue
Service (SARS) significant new investigative and punitive
If you weren't already weary of the taxman, it is now time
to "get very scared".
The powers will come into effect with the Tax Administration
Bill (TAB), expected to be promulgated in the next four to six
weeks, according to Dr Beric Croome, a tax executive at law firm
Edward Nathan Sonnenbergs (ENS).
"If taxpayers appear on the radar of SARS for
non-compliance or suspicion of non-compliance, they will very
quickly find out the added powers that SARS enjoy as a result of
the amendments," says Ernie Lai King, also a tax executive at
Notable new powers provided to SARS under the drafts
The right to issue a jeopardy assessment compelling the payment
of tax prior to the normal returns due date;
The right to apply to courts for a preservation order to seize
the moveable assets of tax defaulter;
The widening of search and seizure powers so that a warrant is
not always necessary; and
A jeopardy assessment can be issued to a tax payer when SARS has
reasonable suspicion that the collection of tax is in jeopardy.
This would occur where the tax payer has previously failed to
submit a tax return or has filed an incorrect tax return.
"SARS can issue a jeopardy assessment in advance of the
date in which the return is normally due," says King.
A preservation order "may be made in respect of assets if
SARS suspects such assets may be dissipated to frustrate the
collection of any tax due", says King.
"The court can authorise a seizure of moveable assets or
they can appoint a curator bonis and that will mean the assets will
vest in the curator."
This would occur where a tax payer has defaulted on
Under search and Seizure amendments SARS can, in certain
circumstance, enter a premises and search and seize without a
While SARS would initially need to apply for a warrant, Lai King
warns that "in carrying out the search, should SARS on
reasonable grounds believe that relevant material is not on the
premises mentioned in the warrant ... they can simply go onto other
premises without a warrant, if they believe evidence is at risk of
The sections that replace a Section 74C enquiry still have no
time limit in which SARS will have to wind-up the enquiry and
The provisions authorise SARS to hold an enquiry into the
affairs of an individual suspected of non -compliance with tax
"It's a very, very harsh enquiry and it's a costly
thing to attend because you need good legal representation,"
Under the provisions SARS can subpoena an individual for any
information required and they can call in any other individual to
testify under oath as to the activities of the individual under
investigation. But "there is no time limit specified ... they
can just keep you on a string".
"SARS from their point of view and in their reality, find
people who are really dishonest. SARS argues they must have these
very vast powers to combat that," says King.
But "from our point of view, we see people pulled into
investigations that shouldn't be and they are subjected to
treatment that is not warranted".
Originally published in The Citizen Online,13 June
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Effective collaboration amongst government agencies, automation of processes and capacity building by tax authorities have always been identified by stakeholders as strategies for achieving an efficient tax system.
In response to information provided by FIRS, NSE has sent letters to publicly listed companies, who were purportedly identified by FIRS as non-compliant.
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