With SARS there is never a dull moment and always something interesting to read about …the new, the good, the bad and the ugly.
- The new:
Once-off administrative penalties for late submission of Personal Income Tax returns to be imposed by SARS.
A once-off administrative penalty will be imposed by SARS on taxpayers for LATE submission of their Personal Income Tax returns for the 2020 year of assessment and onwards.
This administrative penalty will be imposed in two instances namely:
- “Taxpayers who were selected for auto assessment for the 2020 year of assessment and failed to accept, decline, or edit the return, but then submit a return after SARS has issued an original assessment based on the estimated auto assessment.
- Taxpayers who were not auto-assessed and submitted the return after Filing Season due dates, prior to the imposition of a recurring administrative penalty.”
Take note: This is a new once-off penalty for late submission. The recurring administrative penalty will still be imposed by SARS when needed.
For more information, see the GEN-PEN-05-G01 – How to Dispute Administrative Penalties via eFiling – External Guide.
Fraudulent alterations of taxpayers’ eFiling profiles.
SARS, practitioners, and taxpayer became aware of fraudulent practices where eFiling profiles have been altered and / or “stolen” from practitioners and / or taxpayers. This is done by individuals gaining access to eFiling profiles through mysterious ways. Security information is changed on the eFile profile, bank account details are changed, refunds are routed to these fraudsters bank accounts.
To combat these types of practices and to restore compliant taxpayers’ profiles and accounts, SARS tasked a dedicated multi-disciplinary Cyber Crime Task team to do the following:
“- Provide first response support by contacting complainants telephonically and indicating SARS’s commitment to resolve the matter and to provide progress updates.
- Manage the restoration of the eFiling profile to the correct owner, including rectifying any cases where returns have been filed with malicious intent.
- Recover fraudulent refunds that have been paid out.
- Collaborate with various stakeholders in SARS to ensure the stopping and recovery of fraudulent refunds as well as to restore the account of the affected taxpayer.
- Initiate criminal investigations, and
- Identify and implement process and system enhancements.”
According to SARS they have not found any indication that the profile thefts are a breach of SARS’ systems, therefore they are of the opinion that practitioners and taxpayers can safely rely on the eFiling system.
Incidents of fraudulent/unauthorised alterations of eFiling profiles, can be reported to the SARS Anti-Corruption and Fraud Hotline on 0800 00 2870.
Difference between a verification and an audit
Regularly it happens that a taxpayer / practitioner would refer to being audited when they / the client receives a verification letter from SARS.
Being selected for an audit and being selected for verification are two different processes.
What is a Verification?
A verification is a face-value verification of the information declared by the taxpayer on the declaration or in a return.
SARS will notify a taxpayer/trader that the return or declaration is subject to verification.
According to SARS, if the return is for the current filing period, SARS will conclude the verification within 21 business days from the date all required information has been received.
What is an Audit?
An audit is an examination of the financial and accounting records and/or the supporting documents of a taxpayer to determine whether the taxpayer has correctly declared his/her tax position to SARS.
SARS issues a Notification of Audit, as well as a notification when additional material is required.
Progress reports of the stage of the audit will be issued at intervals of 90 calendar days from the date of the Notification of Audit.
Note that SARS do not commit to any turnaround time for completion only that the auditor will send a progress report every 90 calendar days.
For more information, see SARS’s Being Audited or Selected for Verification webpage.
Deregistration of tax practitioners due to non-compliance
SARS may deregister a registered tax practitioner in terms of section 204(3)(a) to (d) read with section 256(3) of the Tax Administration Act (the TA Act).
Section 240(3) of the TA Act states deregistration may occur if the registered tax practitioner
- was removed from a related profession by a controlling body for serious misconduct during the preceding 5 years.
- was convicted (in South Africa or elsewhere) during the preceding 5 years of
- theft, fraud, forgery or uttering a forged document, perjury or an offence under the Prevention and Combating of Corrupt Activities Act, 2004 (Act No. 12 of 2004); or
- any offence involving dishonesty
for which the practitioner was sentenced to a period of imprisonment exceeding two years without the option of a fine or to a fine exceeding the amount prescribed in the Adjustment of Fines Act, 1991 (Act No. 101 of 1991).
- demonstrate that he or she has been compliant for that period; or
- remedy the non-compliance
within the period specified in a notice by SARS.
The “period specified by SARS” is 21 business days
Consequences of deregistration
A tax practitioner deregistered in terms of Section 240(3)(a) to (c) may only register as a tax practitioner again after a period of 5 years.
A tax practitioner deregistered in terms of Section 240(3)(d) can only register as tax practitioner again after six months from the date when she/he becomes fully compliant.
According to SARS they have:
- deregistered 1 tax practitioner in terms of Section 240(3)(a);
- d9 in terms of Section 240(3)(b), and
- d106 in terms Section 240(3)(d).
Remember the latest slogan from SARS – #YourTaxMatter, and their warning that non-compliance will be punished or dealt with harshly.
If you have any enquiries, please contact Adri Britz at firstname.lastname@example.org.