Sars says compliance will be easier, but tax dodging harder
The revenue service wants to ease the administration burden for taxpayers but wants to ‘make it hard and costly’ criminals
Sars will be zeroing in on non-compliance and stepping up its enforcement efforts, even as it works to ease the burden of filing returns for millions of ordinary taxpayers, commissioner Edward Kieswetter said on Thursday.
“We are committed to making this a seamless experience ... while at the same time we want to make it hard and costly for non-compliant taxpayers and criminals who defraud us,” he said.
On Thursday, the Kieswetter provided an update on the 2020/2021 filing season, which will include the new Sars auto-assessment system that uses employer and third-party data to pre-populate tax returns for more than 3-million non-provisional taxpayers, which they can either accept or edit through Sars eFiling, or on its mobile app.
The new filing process forms part of the effort to overhaul Sars — with an emphasis on Big Data, artificial intelligence and machine learning — after years of being hollowed out under former commissioner Tom Moyane’s leadership.
The use of new technologies to make it easier for taxpayers to comply also comes as the tax service contends with huge declines in revenues due to the economic fall out from the coronavirus.
According to finance minister Tito Mboweni’s recent supplementary budget, tax revenues will be more than R300bn short of the targets outlined in the February budget.
By 7am on Thursday, Kieswetter said more than 62,000 taxpayers had already filed using this new method with just less than 12% identified for audit by its risk engine. He said the level of compliance from employers — that are required to file information with Sars on behalf of their employees — has “a long way to go”.
Sars expected more than 567,500 employer reconciliations but had only received just more than 325,900 — a compliance rate of 57% — Kieswetter said, appealing to employers to “fulfil their obligations or face the law”.
Many employers had also revised their submissions to Sars after the commencement of individual filing, creating problems for both Sars and employees when they are required to file their tax returns.
“While we are passionate about making it easy for taxpayers to comply, we are equally focused on stepping up our ability to detect non-compliance on all fronts,” said Kieswetter.
Between April 1 and July 17, Sars had already seized illegal cigarettes worth R77.7m through joint operations between Sars, the police and the SA National Defence Force, Kieswetter said.
The Sars illicit economy unit had also stopped R4.1bn in fraudulent tax refunds, he said, while a further R511m in preservation orders had been issued to secure assets related to illicit activities.
The revenue service has also referred 23 cases to law enforcement agencies for further investigation, said Kieswetter, adding, “We continue to work with those agencies to bring those entities and individuals to book.”
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