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Breaking public goodwill: SARS chases the cents from or...

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Breaking public goodwill: SARS chases the cents from ordinary taxpayers while high fliers remain footloose

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Marianne Merten has written on Parliament since 2016 for Daily Maverick. The intersection of governance, policy and politics unfolds at many levels, from tiny nuggets of information hidden in the voluminous stacks of papers tabled at the national legislature to the odd temper tantrum by a politician. Sometimes frustrating, sometimes baffling, even after 26 years as a hack, there are few dull days in the parliamentary corridors.

A late-night email showed how a tax verification by SARS, despite an already paid refund, remains ongoing.

I asked around. I am not the only one among middle-class professionals, and in the working class, that the South African Revenue Service (SARS) seems to target for verifications, and even audits or final letters of demand for what SARS has realised it missed years ago.

It’s a crackdown on easy targets, the easy way to tick box institutional performance targets in high numbers. Chasing cents from ordinary taxpayers is a lot easier — and good for the stats — than tackling high fliers with enough resources to ensure staying just on the right side of tax avoidance. 

Late at night on 16 February 2022, it was my turn to get the SARS equivalent of a pink letter.  

“PIT [personal income tax] Enforcement”, is the heading in a clear show SARS works from the basis I somehow did wrong.  

I did not. 

For context: in the 2021 tax year I paid in well over a couple of hundreds of thousand of rands in tax, and claimed doctors, medicines and surgery expenses of around R34,000, leading to a tax refund of a little more than R8,450 paid into my bank account on 29 December 2021. 

All claims are backed up by receipts. My long-standing and long-suffering tax accountant has a rather conservative approach: even if a deduction is permitted — no receipt, no claim. I curse when I lose those blerrie slippies. I lost plenty, and I can’t even claim for working from home because my kitchen table doesn’t qualify. 

Back to that late-night “personal income tax enforcement” email. It was followed on 17 February 2022 by an early morning SMS:

“Dear Taxpayer… Please note that additional supporting documents are required by the SARS official working on your income tax assessment verification case…” 

But on 29 December 2021 SARS had paid into my bank account the R8,456.39 refund that was held in abeyance pending “verification”. A nice 2022 pressie, I thought as I was recovering from Covid-19. After all, any reasonable person would believe SARS had paid the refund only because their verification checks and so on confirmed it was indeed due — and that it was a case of Case Closed. 

Clearly not. 

And so that 16 February 2022 late-night “enforcement” email/early-morning SMS resumed my “verification” that had started three months earlier.

On 9 November 2021, the SARS SMS said, “Dear Taxpayer… Your SARS Income Tax assessment for 2021 was selected for verification. CaseNo:…”, and was followed a day later by an SMS acknowledging that all requested documents were submitted. 

“Dear Taxpayer… Tax year: 2021. SARS has received your supporting documents. Your verification case will be allocated to a SARS official. Note that SARS aims to finalise cases within 21 working days from receipt of supporting documents.”

It took a little longer, but the refund was paid before 2021 was up. 

Now it looks like that 29 December 2021 refund was simply for SARS to produce good internal targets of so-called completed cases — without the cases actually being finalised, or completed. In chasing ordinary taxpayers’ cents, clearly SARS reserves the right to do as it wishes.

In my case, SARS now wants “proof of payment” through my bank statements of those medical, medicines, doctors and surgery payments for which I already have submitted receipts for — and what’s called a “detailed member tax report by beneficiary” from my medical aid. 

You don’t even have to read between the lines — SARS thinks I diddled. 

So I went to the bank — the teller and I had a good chinwag and mutual shrug of how nothing can be done about SARS demands but comply — and I got that line-by-line item breakdown from the medical aid. 

The cost of a year’s worth of current and credit card bank statements? Never mind, they are bank-stamped so SARS can’t come back to say I fiddled. The cost of holding on to speak to someone at the medical aid? Again, never mind. 

I have resources — and unlike many, I don’t have to sacrifice a day’s wages to go queue at the tax office to get stuff sorted. 

Judging by the queues at the SARS central Cape Town office, going around the block from early in the morning for the past ten days, the tax collector is clearly on a plug.  

Yes, SARS is under pressure to collect for the national purse amid a stalled economy and rising need for social safety measures against hunger and poverty. Yes, SARS has to re-embed the tax compliance that plummeted in the State Capture years, and its own internal wracking. 

I believe in paying taxes because it’s for the public good, particularly in a country of such steep, stubborn poverty and inequality such as South Africa. And, yes, my private bank statements that I am forced to disclose given SARS’ posture of alleging guilt, miss only two receipt-backed claims totalling less than R450 paid in cash, clearly. SARS’ talk of “enforcement”, “verification” and “case number” in its posture of guilty-until-you-prove-yourself-not, grinds.  

It grinds particularly in the absence of demonstrable action against high fliers who, alongside State Capture beneficiaries and also the tobacco, booze and other smugglers, don’t seem to be taken to tax task, or even to tax litigation. 

Chasing the cents from working and middle-class taxpayers, while giving a free pass to those who enrich themselves by the millions is, if not an abuse of public power, then at least penny-wise, pound-foolish. 

It means the tax collector fritters away public trust — and public goodwill. 

And as SARS should well know, public goodwill is priceless. DM

 

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All Comments 32

  • Well said Marianne, the state is sucking the life out of the honest taxpayers while the big thieves continue to get a free pass. In a totally fair world I would expect deductions or rebates for those services which the state has failed to supply and for which I am paying directly – private security and schools, solar energy, drinking water, medical insurance to name a few. Our after-tax income is similarly abused – the fuel price is loaded with taxes and other levies that exceed the fuel cost – my vehicle is priced at twice the price of my European and Asian counterparts in order to support local manufacture. We, as the end consumer, also shoulder the final VAT burden of the retail cost of goods and services. If you do manage to survive long enough and gather some bit of wealth, the state jumps in and taxes your estate when you die.
    If taxes were levied on actual performance, just like it is in business, the state would be unsustainable.

  • I couldn’t agree more. I’ve always been scrupulously honest in paying my taxes. As a provisional taxpayer, I had until the end of January to submit my 2020/21 return which I duly did in early January. I then received a relatively small refund as I had made considerable donations to NPO’s . I then received an administrative penalty of R2000 for late submission. After considerable time spent on the phone, I eventually talked to a SARS agent who said it was a mistake but she couldn’t rectify it and I had to go 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. With most of our taxes being wasted or stolen,how does Kieswetter expect to continue collecting taxes when he is going about alienating the very people who are paying most of the tax. A tax revolt is coming ! I’d much rather give to Gift of the Givers.

  • SARS collects so that most government officials and their family& friends can gorge themselves. The rot starts and started from the very top.

  • Sars is compromised,Mr Kieswetter,if you want to broaden your tax base,go to taxis,go to foreigner shops.Even better go after ,Mark Lipfman, Donkie Booysen,and the myriad other gangster bosses.You haven’t got the balls.Just like what SAPS has become, you catch the guppies and leave the sharks!!!Worst is ,you become sanctimonious about this, bragging about it while Rome(South Africa)is burning !!!

  • Wonderful to see this out in the open. I do this for a living, and SARS is constantly auditing the same tax payer, year in and year out. They have not yet , over a period of 15 – 20 years found any discrepancies on the returns submitted, but continue to verify/audit every year, at extra cost and wastage of time for all concerned. SARS needs to update it’s IT department, as they continue to send out “system driven” letters which are incorrect. eg. You vat account is in arrears, while it is not. You are not tax compliant, but they are. 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.

  • Not to mention how they harass small businesses like ours. They suddenly make us non-compliant because of some brain surgeon’s decision that our VAT claim for exports was “higher than normal” even though we have all the export documents to prove it. 6 months later we are still battling to get clearance???
    As you say, easier to go after the small fry than to follow up on the real crooks.. Boggles the mind!

  • Disgraceful conduct by SARS! This type of penny pinching from middle class taxpayers whilst state looters, organised tobacco criminals, the taxi industry and gangster bosses enjoy their opulence without being harassed by SARS to pay their tax dues will quickly dissipate public trust and goodwill in SARS. Is this what SARS wants?

  • News! I am convinced most of the high-flyers you refer to have connections with the anc or are cadre deployees. They are protected for ‘anc unity’ sake. The rest of the tax-paying public just don’t matter.

  • I am due a small refund as per my statement from SARS, this was last year in November. I was asked to submit documents which i did in December’21 needless to say I am still waiting, spent 2 hours waiting to speak to a consultant in Feb22 who says they have missed the deadline and they have to send me an update in 48hours…. needless to say that has passed to and still no refund. 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.

  • Thank you, Marianne and the commentators, for restoring my sanity – I am not alone. My experience is almost exactly the same as Stalker’s, except that I’m still embroiled in the ‘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 (if it was a genuine error – how cynical I’ve become). At least I won’t waste any more time waiting for an apology…

  • So true. My wife who “earns” a couple of thousand per annum in interest only was audited! WTF! If just one of our illustrious tenderpreneurs was audited I suspect SARS would be able to collect more than from all this middle class harassment. Like most government institutions, SARS are really scared of hard work.

    • They are not scared, that would imply they know what hard work is. It’s not fear, just galactic stupidity and incompetence drizzled with misguided ideology.

  • Another PR failure by the regime. Imagine if the high fliers like Zuma and his cohorts of criminals were publicly shamed and had the overdue millions extracted from them. What an inspiration to ordinary tax payers that would be…

  • The problem with taxation in a country like ours is that:
    a) most workers, if employed, are in agriculture or small, informal enterprises being paid in cash or on contract – which means devising a meaningful tax collection policy is difficult – but not impossible.
    b) due to inefficiencies in SARS, our government exploits the tax options available rather what is rational and fair to all, thus not getting the balance between consumption and income taxes right.
    c) because of the size of our informal economy, the government has little idea of the potential impact of major tax policy changes, so marginal tinkering changes are made instead of a proper overhaul.
    d) income is unevenly distributed and a culture of non-payment is almost endemic which the government is unwilling to address.
    Our tax and payment collection policy is thus more about the possible than the optimal – and the possible is to hammer those who are already compliant.

  • Never mind getting fined for late submission of returns that were not submitted late – SARS generating extra income for its quarterly “tick box” exercise, whether they are reversed or not. And try having a mentally disabled person in the family. Someone who was born with his genetic disability, who will live with it for the rest of his life, and who will require the care of his family for the rest of his life. So you have to fill in a special form. Can it be filled in by your GP? Good grief, no! What on earth does a GP know about mental disability? It MUST be a specialist. So you trot off to find a specialist in genetics to complete the form. These, of course, are two a penny (NOT). But you find one, who kindly and graciously does so. Then, naturally, comes the audit. Every year, without fail, for I can’t remember how long, the return gets audited. I used to get quite nervous about an audit; now I just sigh deeply and resign myself to the wasted time of scanning medical receipts and every other document I think that they can possibly want. For what purpose? Every return for god alone knows how long has received a clean audit. But no, maybe THIS year, SARS might find a few rands to claw back from us. Eish.

  • Dear Marianne, I hear you, oh I hear you. My return / assessment was flagged for audit this year – as it always is. As always, documents were provided. In more than the claimed 21 working days, further documents were requested. On approx 30 November 2021, 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. When the likes of Julius Malema, by way of explanation of large sums of money deposited into his account, claims that it is a gift from a friend, I rather wonder whether SARS goes after said friend for donations tax. Probably not.

  • Marianne is 100% correct. Under Tom Moyane’s reign, I was the perfect example of how SARS fiddled my return that year so as to show my full annual tax as outstanding at the tax year end, despite having paid my taxes in full to SARS each month during the year. That was how Moyane could claim to have achieved his all time historical high in tax revenue. It took my accountant one year to resolve.

  • I have no problem with SARS reminder correspondence but what I take strong exception to is SARS threatening us with jail terms for (effectively) petty tax offences. I don’t send out reminder notices to my clients threatening them with jail terms if they don’t pay. I have no problem with fines or penalty payments but jail/criminal record type threats like this are way over the top. I remember seeing this legislation being processed through Parliament and I was very dismayed that no-one appeared to seriously question it. It cannot be in accordance with our Constitution for citizens to be jailed for not filing a tax return or similar.

  • I’ve just deleted two emails supposedly coming from SARS because I knew that they shouldn’t be contacting me.
    Please beware of all the scammers riding on the back of this.

  • It’s quite interesting that the author considers herself in the category “middle and working classes” and yet pays personal income tax of “hundreds of thousands”! That level of income puts the author in the top 1% of income earners in South Africa.

    This confirms what the SALDRU Income Comparison Tool has been showing for years: South Africa’s rich don’t know who they are.

  • The truth is SARS has never depended on our goodwill. None of my dealings with the taxman has ever been ‘nice’. Like Telkom, everyone hates the taxman, he knows it, and doesn’t care. Pay your taxes, or else …

  • Dn, a ouple of hundreds of thousands in tax? What are you earning?? It seems like you are once of those high flyers. Or is this a confirmation of how severely underpaid I am as a teacher?

  • Every month without fail (with the exception of two months where they were obviously busy with something else), my small business VAT return gets selected for verification. Costs thousands of rands each month to get the accountant to send them tons of documentation. Verifications are completed with nothing found and next month same story. God forbid you have a VAT refund – The quickest time to get a refund has been 10 months but if I was a connected individual I would get the refund before submitting the return !
    Kieswetter is always quick to threaten all the little people, we are always automatically guilty and somehow we are always fiddling the system, yet the big fish are angels by comparison. It’s an absolute disgrace. Try calling them or even emailing to get a simple answer and no one has a clue. In another company I have been trying to register for PAYE for 3 years with zero success. All I get are nonsensical answers from all the “specialists” at SARS. I have no warm fuzzy feelings to them at all. All they’re doing is collecting so that the pigs at the trough can continue with their gluttony.

  • We/I am a small business owner and have been since 1998. We are in Sales and over the years our customer base has moved away from our “traditional” markets of Eskom – we supplied the infra-red monitors on all the boilers at Arnot P. S., all level sensors on the Komati River scheme, & Water/waste-water, our last was the Instrumentation maintenance at all of JoBurg Water’s Northern Sewage Treatment Plants. We now supply the Industries in Botswana, Kenya, Ghana, and Tanzania. Therefore, our sales are all VAT-free. For the past 10 years, or so, we have suffered about 3 audits on our VAT return when it went outside of the “norm” for a refund. However, in 2021 we have suffered 4 out of 6 VAT audits – the latest being our November VAT refund – we claimed an amount of some R167k refund – some large orders were invoiced during Oct/Nov. Our initial call to SARS after 21 days gave case number of 4103833449 and last Thursday’s case number was 4180222531 ! We have been told on numerous occasions that our case has been escalated – one comment was that our FICA details on file are from 1982 – FICA did not exist then! One was our July return was escalated – the latest is it has been escalated to management as it has taken so long. 75% VAT refunds sorted within 21 days – hogwash – we are now over 3x that time and same previously. We cannot pay our suppliers, we have lost about R10k in settlement discounts, when we do not pay SARS we are charged penalties – SARS’ inefficiencies are chargeless.

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