Sars chasing tax debts

SA’s largest retail banks have received between 1 500 and 2 000 third-party agent appointments daily over the past week, as Sars ramps up its tax collection efforts, a tax practitioner has confirmed.

In terms of the Tax Administration Act, Sars commissioner Tom Moyane may appoint a third party to withhold and pay over any tax debts due by a taxpayer. For individual taxpayers, such third parties typically include employers, banks, investment managers, insurance companies, attorneys or any debtor that owes the taxpayer money.

Yet, there’s a risk that tax debts or penalties may not be actual debts due to changes in a taxpayer’s status or a Sars system error. Taxpayers must ensure the debts reflected on their statement of accounts or admin penalty statement of accounts for each tax type are correct.

FirstRand’s Marelize Loftie-Eaton previously advised taxpayers aware of outstanding debts to approach Sars and negotiate a deferred payment plan. It could become more difficult to get these plans approved in the collection drive until March 31, 2018.

Sars says taxpayers may apply to settle tax debt in instalments if they’re unable to pay the full amount, apply for the suspension of the debt if they intend to submit or have submitted a formal dispute, or apply for a compromise of a portion of the tax if this will provide a higher return to the fiscus than liquidation, sequestration, winding up, or other collection measures.

Sars is under pressure to ramp up its collection efforts after the mini budget showed that tax revenue was expected to fall almost R51 billion short of the 2017 budget estimate for 2017-18.

“After the engagement process has been completed, Sars debt collectors may identify and appoint any third party to pay funds in their possession over to Sars,” Sars said.

It said Sars debt collectors followed a continuous engagement approach, which involved outbound calls, tracing of taxpayers and sending out notices to the taxpayers to inform them of the outstanding tax debt, and to clarify the debt position of the taxpayer.

“Through these engagements, taxpayers are given an opportunity to either dispute the tax debt, make an application for suspension of the collections process, or make payment.”

Sars is under pressure to ramp up its collection efforts after the mini budget showed that tax revenue was expected to fall almost R51 billion short.