#YourTaxMatters: Thou shall not commit tax crimes

One question that many South Africans ask is: “Does everyone in the country pay their fair share of tax?” This is something that has been a burning issue in South Africa for many years.

In fact, it is relevant now more than ever, especially in light of all the news around corruption.

This topic includes tax evasion and tax fraud, such as under-declaration of income and claiming of fraudulent deductions or expenses when submitting tax returns across various tax types administered by SARS, amongst others.

The South African public may not be familiar with the exact statistics related to tax fraud or how these fraud syndicates are dealt with by the law.

However, many may still ask: “Will the offenders get away with this?” The answer is definitely: NO.

SARS as a revenue authority has various initiatives in place to combat the ongoing fraud committed across all tax types administered by the organisation. SARS would also like to make taxpayers aware that they can take various actions to assist SARS and the country to avoid possible revenue loss.

The SARS website has detailed information on how one can report tax fraud. This includes a hotline (0800 00 2870), email addresses and valuable information on identity fraud, scams, and phishing.

It is particularly common during the Individual Filing Season for people to fall victim to tax fraud. Sadly, sometimes taxpayers are not even aware that tax fraud has been committed on their eFiling accounts.

Taxpayers who, albeit unwittingly, allow offenders to get away with this need to be aware of how it impacts the country’s revenue collection efforts, which in turn undermines efforts to rebuild and grow the South African economy. The funds collected by SARS are used by the government to build roads, schools, hospitals and infrastructure, amongst other essential services.

Taxpayers are encouraged to “report a suspicious activity” by using the functionality on the SARS website. They are able to remain anonymous if they are not comfortable with disclosing their personal details. SARS wishes to make it as easy as possible for taxpayers to come forward to report a tax crime.

Additionally, the SARS Strategic Vision 2024 has committed to making it hard and costly for any taxpayer who, wilfully and intentionally, seeks to break the law through tax avoidance and fraud. Thus, the legislation ensures that SARS provides protection to those who report tax crimes.

All taxpayers are expected to meet their obligations and pay their fair share of tax. Working together to tackle tax fraud is the right thing to do.

Regional News

• Employers are reminded that the Annual Reconciliation Declaration (EMP501) submission period closes on 31 May this year. This means that employers are required to submit their annual reconciliation declarations covering the full tax year from 1 March 2021 to 28 February 2022, accurately and on time. If this is not done, employers could face penalties.

The EMP501 must reflect accurate and up-to-date payroll information about employees, employees’ tax (PAYE) payments made and tax certificates (IRP5/IT3(a)’s) generated.

An employer with 50 or fewer employees can file a reconciliation that contains a maximum of 50 IRP5/IT3(a) certificates (tax certificates) electronically via eFiling. Employers with more than 50 employees must file the EMP501 annual reconciliation using e@syFile™ Employer.

The employer must download and use the latest version of e@syFile version 7.2.3. Any information submitted to SARS using a previous version will not be accepted. For the latest version, go to the SARS eFiling website.

• Some pensioners may have noticed that the amount of tax that was deducted from their pension fund/retirement annuity over the past couple of months has increased. However, this is because the legislation was introduced on 1 March 2022 for pensioners with more than one income to be charged a fixed monthly rate by SARS, instead of being hit with a massive tax bill on assessment (during the annual Filing Season).

In other words, SARS will provide a more accurate PAYE deduction amount for pension fund administrators to apply on a monthly basis (at a fixed rate), rather than have them face a big tax debt at the end of the financial year.

If pensioners want to opt-out of this higher monthly deduction, they should contact their pension fund/retirement, or annuity administrator.

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