X

This is not a paywall.

Register for free to continue reading.

We made a promise to you that we’ll never erect a paywall and we intend to keep that promise. We also want to continually improve your reading experience and you can help us do that by registering with us. It’s quick, easy and will cost you nothing.



Nearly there! Create a password to finish up registering with us:


Please enter your password or get a login link if you’ve forgotten


Open Sesame! Thanks for registering.

Groundswell of disgruntlement as ordinary taxpayers bad...

South Africa

ANALYSIS

Groundswell of disgruntlement as ordinary taxpayers badgered by SA Revenue Service

Edward Kieswetter, commissioner of the South African Revenue Service. (Photo: Dwayne Senior / Bloomberg via Getty Images) | (Photo: Gallo Images / Fani Mahuntsi)

From tax refunds revised to tax debt to final demands, sometimes for tax returns dating back several years, and system glitches failing to record appeals and disputes, ordinary taxpayers recount the capriciousness of the South African Revenue Service.

By any account, experiences with South Africa’s tax collector — shared by readers online and on social media platforms — point to stressful, frustrating and irksome interactions with SARS that have left ordinary taxpayers floored.

That’s the overwhelming response to a personal reflection piece by this reporter on how, although a tax refund was paid after verification in late December 2021, further “enforcement” followed in mid-February, with additional supporting documents to prove the validity of receipts already submitted.

The SARS approach to ordinary taxpayers of “guilty until you prove otherwise” is raising hackles, particularly in the absence of clear, public and quantified tax action against booze, tobacco and other smugglers, politically connected tenderpreneurs and the beneficiaries of State Capture. 

Among the responses, a couple* on pension recounted how a tax refund, paid at the end of December 2021 after a verification process, was followed by a demand to pay more than R9,000.

Their request to SARS for reasons and details on why a tax refund was reversed into a tax demand has not yet been answered. Emails had to be written after it proved impossible to log a dispute and file an appeal on the SARS system. 

A medically boarded public servant* recounted how SARS, instead of paying a refund, demanded payment from the pension received from the Government Employee Pension Fund (GEPF).

In one case related to a previously incomplete tax return, a demand was adjusted from R23,000 to R7,000 after correspondence with the SARS debt recovery office — and after some previously missing information was provided to the tax collector.

This particular taxpayer* had not known info was missing; this only emerged now, with the demand.

It is all about the question of approach. While the SARS way seems taxpayers are guilty unless they prove otherwise, this may well, in the coming months and years, erode compliance and public goodwill, and boomerang badly in South Africa’s deteriorating socioeconomic conditions.

A set of detailed questions — including the impact of SARS’ attitude on public goodwill and tax action against State Capture beneficiaries — was emailed to the tax collector on Thursday, 24 February. Even though the requested response time — end of Monday — was extended to lunchtime Wednesday, 2 March, no responses had been received by 6pm. 

But SARS Commissioner Edward Kieswetter is on Twitter record regarding the original personal reflection piece. 

It is regrettable when journalists use the privilege of their platform to ventilate their personal tax affairs. I suggest that this matter be dealt with privately to maintain taxpayer confidentiality and the integrity of the process,” he tweeted. 

Readers and social media users had a different take, including lawyer Richard Spoor, who responded to the SARS Commissioner:

“Fact: you (SARS) spent 90% of your time harassing people who fill in their forms and jump through the hoops for you. Chasing big time criminal tax evaders is only a sideshow (Come this side and I will tell you a few stories about it)…”

Also on that timeline, Twitter user Meepo complained, “I’m now in my 3rd 21 day waiting period for a refund that I was supposed to receive last year… Mr Kieswetter, I think you guys are missing the plot.”

That got a response from @SARStax asking details be sent to [email protected]. It’s an email address often cited by Kieswetter when taxpayer issues pop up on his Twitter timeline.  

Online responses included one Daily Maverick reader* recounting how, after waiting for two hours to speak to a consultant, the promised corrected status update failed to materialise.

“I too am a believer in paying my taxes, but come on SARS, you need to play your part too, stop harassing the middleman and target the real dodgers.” 

Self-confessed “scrupulously honest” provisional taxpayer, Daily Maverick reader Stalker*, was early submitting the January tax return and received a small refund — only to receive a R2,000 administrative penalty for late submission. While SARS acknowledged the mistake in a telephone call, rectifying this could only be done through the dispute process. 

“Suffice to say, that this was also prolonged!!! Eventually, I had the penalty reversed. However, any goodwill has long since evaporated.”

A similar experience by another reader* remains stuck in the so-called Request for Remission process. “‘Remission’ — what a way of describing redress of an admitted SARS mistake! I hate to think how many hours of searching the website and waiting on the phone I’ve spent on trying to correct a SARS error…”

A call-out to Daily Maverick Insiders to share their SARS experiences saw similar accounts of receiving penalties for, ironically, submitting returns before the statutory deadline. For one respondent, the R500 penalty was “not worth the dispute”.

Coincidentally, of the 171 responses to this call-out, fewer than 10 indicated they had no problems. “I want to compliment SARS on their sterling work and huge improvement in my personal tax return experience” was the only positive comment.

Most recounted bullying, feeling targeted for repeat audits — even though previous audits showed no irregularities — and tax demands going as far back as 2014 and 2013, well beyond the five years taxpayers are required to keep their documents.

Repeat audits and verification, with repetitive demands for documents that increase administrative burdens, also emerge in readers’ responses to the personal reflection piece. 

“I received my completion letter and notification that there was no change to my assessment. Two days later, I received, instead of my awaited refund, a notification that I had been flagged for audit, with a new case number. 

“It took almost four months before the process was complete — still no change to the assessment,” according to one Daily Maverick reader* in an experience echoed by another reader running a small business. Verifications are completed with nothing found and next month, same story.”

Reader Love JHB South* commented how SARS was auditing the same taxpayers, year in and year out, even though no discrepancies are ever found.

“SARS needs to update its IT department, as they continue to send out ‘system driven’ letters, which are incorrect… We need a big overhaul here, and no more emails to clients with incorrect information on them. 

“SARS needs to leave the easy targets already on their database, and start adding the wealthy, non-tax paying individuals and businesses.”

That the pressure is on SARS to increase tax collections is clear, given the increasing joblessness, hunger and poverty in South Africa — Covid lockdown restrictions hit Day 707 on Thursday — and the domestic R308-billion-plus annual debt service costs.

That was pretty much clear from Budget Day on 23 February, when Finance Minister Enoch Godongwana welcomed R181.9-billion in additional — and previously unexpected — tax revenue, but also cautioned this could not be relied on as commodity price windfalls are temporary.

A few days later, Kieswetter told Business Day how SARS efforts had contributed some two thirds to the additional tax collections, not only a commodities windfall or overall economic recovery.

It’s an echo of what the tax boss also told others, like the Money Show.

And that meant tax compliance was now up to 64.5% from 62%.

According to Business Maverick, SARS has selected one in five personal income tax returns for verification, which in turn led to final demands in favour of the tax collector in about six out of 10 cases.

“That means, if we had not gone through the verification procedure, those taxpayers would have received refunds unlawfully,” Kieswetter said in an interview, adding later:

“Sometimes, the process may take longer than 21 days, but preventing fraud and saving the country money justifies the work we do.” 

Revamped SA Revenue Service reels in big fish, focuses on superwealthy

That work included re-establishing a high-value unit — a similar unit was made defunct when Tom Moyane was the tax boss — with a view to looking beyond income towards the overall wealth base, including investments both overseas and local, properties and such.

Although Kieswetter told journalists at the pre-Budget speech briefing that progress is being made, also in corruption investigations, the work towards this might be “invisible”.

Some of that “invisible” got a little more visible when, on 26 February, the Hawks said in a statement that three men appeared in the Pretoria Specialised Commercial Crimes Court for R10.2-million VAT fraud.

A day later, a SARS statement announced the attachment of assets of two diagnostic radiologists in relation to a R52-million tax debt after their application for a compromise was declined, according to a SARS media statement on 25 February.

Section 200 of the Tax Act allows SARS to “compromise”, effectively to lower due debt, “to secure the highest net return from the recovery of the tax debt”.

In that statement, Kieswetter said SARS wanted to make compliance easy and simple for taxpayers, giving them clarity and certainty on obligations.

“We regard the overwhelming majority of taxpayers as honest and willing to comply… However, wilful and criminal non-compliance from whatever source, will not be tolerated. SARS will use every legal instrument at its disposal to make it hard and costly for such taxpayers and traders.” 

However, judging from readers’ and social media users’ accounts, ordinary taxpayers are more likely to experience the tax collector throwing the book at them. Never mind tax compliance. DM

 *The identity of readers and others are known, but withheld to prevent unintended consequences.

 

Gallery

Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.

Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.

All Comments 15

  • Harassment the guppies and leave the sharks!!!That’s my impression.Public relations and how you treat law abiding citizens will improve your image,IF you are INTERESTED Mr Kieswetter.Manners goes a long way or the lack there of!!!Don’t assume everybody knows how to fill in a tax form, or that everybody is a mathematical genius.You know what they say about assumption.Also it seems you really struggle with high profile criminals and investigating them!!!

  • I often ask “whose money is it anyway?”. My experience of SARS is as decribed above. VAT refunds delayed. Absolutely NO recourse whatsoever other than a properly expensive process. Impossible to comply with demands. A revenue service desperate to choke every cent it can from those who pay to support it – and those who see their money spent on criminal enterprises harboured within government. We see more money spent on the VVIP protection unit than on prosecuting state capture. You know what? The money is better off left with me and disbursed to those that really need it (jobs) than put into the hands of the thieving predatory state.

  • I would like to challenge Mr Kieswtter to spend a day in my small office, as a tax practitioner, trying to resolve daily issues on behalf of ordinary Taxpayers. I doubt that he has ever had to phone the SARS call centre, had to try and resolve registration issues or to be on the other end of its aggressive debt collection bombardment, even when the taxpayer does not have outstanding debt with SARS. They rely on technicalities and the ignorance of taxpayers to harass and force them into paying debt that is not always due.

    He is obviously totally out of touch with individual taxpayers. He, and SARS, are definitely not respected, contrary to what he believes, and his “self importance” attitude makes it even worse.

    • It is a shame how quickly power affects integrity and respect. Kieswetter and his cronies are all on a power trip. Do as we say, or else ….

  • I am another victim of being fined (only R250.00) for late submission although the return went in a week early. No response to the dispute lodged.

  • This article is excellent and with a piece in it-
    “I too am a believer in paying my taxes, but come on SARS, you need to play your part too, stop harassing the middleman and target the real dodgers.”
    that sums up this country in one fell swoop.
    It’s far, far easier for the authorities (SAPS/SARS etc.) to target the good, old, normal Joe Soap or Sipho Gumede in the street than those who are the REAL criminals that get away with everything because of their political or fiscal clout!
    Get REAL SARS, get the REAL culprits.

  • I agree with numerous views expressed above. During the years PG was commissioner SARS was easy to deal with, but in the last 8 years this changed with SARS automatically regarding the taxpayer as a dishonest adversary, rather than their customer. The attitude is hostile towards compliant taxpayers. My affairs have been “randomly” reviewed every year for about six consecutive years, with no adverse findings. It may be appropriate to change their name to SARC replacing the word service with collections. Service is not part of the the focus, and the current focus on compliant taxpayers, while ignoring connected crime syndicates and those who pay no tax at all, results in a lowering of tax morality. This is exacerbated by the government’s wastage of the tax rands collected.

  • Does SARS use race to decide whom they go after?

    I and a friend have both had to supply proof of excess medical expenses despite having provided copies of medical tax certificates with other supporting documentation. The 57 page document I prepared was so large (because of all the scanned data) that I had to split it in two in order to download it to SARS efiling.

    I’d like DM to investigate and report on the tax-free (i.e. no FBT) perks of government and municipal employees. For example, which municipal accounts for individuals are written off programmatically because they are flagged as V.I.P.s?

  • Thank you Marianne for a great article again. Also as a tax practitioner running a small business, we spend most of our time sorting out issues that SARS has created. We need a dedicated phone line and staff at SARS who only assist tax practitioners, and who are knowledgeable regarding tax matters.

  • Mr Kieswetter is clearly deluded, there is no way to sort out personal tax problems using the mechanisms his organisation provides. I’ve been trying since July last year to get a document from SARS. They promised it, but consultations, appointments, 21 day wait upon 21 day wait, being no 700 in the call centre queue a few times, no result. Then tried complaints on the website (three times) the last one was dismissed with no reason and I haven’t tried again.
    So dear Commissioner Edward Kieswetter what do you suggest I do instead?

  • How do SARS employees do their tax returns? Surely they also get the same treatment as us, would be interesting to get an anonymous insider take.

  • Dear Marianne, thank you for this follow-up piece. Mr Kieswetter’s response to your original article is disappointing. While acknowledging that his job is an enormous and unenviable one, I am concerned by his use of the strategy associated with ‘guilty’ persons: attack the individual (and the media outlet) rather than deal with the issue.

    Your articles amply demonstrate that at the very least, SARS has serious system glitches. How else does one explain a completed assessment being identified for verification – again – two days later? How does one explain an emailed request from SARS for documentation to be submitted as follows:
    This information may be:
    Emailed to : [email protected]
    Posted to the address indicated above
    Dropped off at your nearest SARS branch
    and then followed by an email asking the taxpayer not to use said email address because it is no longer in use? Followed by a further request for documentation to be sent to the very same discontinued email address? While all the while the same request letters appear on the taxpayer’s efiling profile and the same documents are to be downloaded? How is the taxpayer supposed to know what to do?

    This sort of experience undermines taxpayer confidence in SARS’s ability to do its work.

    SARS has perhaps forgotten that there are human faces and stories behind the taxpayer numbers. The articles serve as a reminder that compliant taxpayers deserve to be treated fairly and respectfully, and indeed, should be nurtured.

  • The one I love is when they just spirit money out of your accounts. No due process, no little niceties like even sending a demand, you simply find a debit. You ask the bank how this fraud happened…No, it was SARS. Speak to SARS, no-one can tell you why or what it was for. The basic principle of our legal system is audi alterem partem (both sides must be heard) but for SARS that is out the window – it is a law unto itself. And what happens when bureaucrats are handed unfettered power? They regard their victims with distaste if not outright contempt, safe behind the anonymous facade of an organ of state. The most precious thing to a businessperson is time, one has perhaps 200 hours of productive time a month, but more and more of the bureaucracy requires that you fritter that time way endlessly filling in forms and jumping through arbitrary hoops for the amusement of the swollen pustulating beast we so ironically call the civil service.

  • Mr Kieswetter, with respect, are you in LaLaland? Most taxpayers are just not up for the fight with SARS. And it is a fight, make no error, to interact with SARS. I call it ‘Tax Terrorism’ or just plain bullying. I recall the days in the 1990s, when Taxpayers would reiterate Trevor Manual’s words to ‘Do the right thing. To pay their taxes.’ I don’t hear people echoing those phrases any more. What a pity. SARS desperately needs to introspect.

  • Please peer review 3 community comments before your comment can be posted