Tax experts against rising SARS aggression

CAPE TOWN — The South African Revenue Service (SARS) is adopting more aggressive tactics to extract information from taxpayers as it tries to achieve a revenue target during a period of sluggish economic growth, tax practitioners say.

These complaints, voiced in Parliament last week, were corroborated by several tax practitioners who said the trust between SARS and taxpayers has broken down.

SARS spokesman Luther Lebelo said that the tax authority “some- times finds that the behaviour exhibited by taxpayers and tax practitioners requires a firmer stance to be taken to ensure that the fiscus is paid what is due”.

The revenue target for the fiscal year set by the Treasury in the February budget was just more than R1trillion. This is likely to be revised downwards next month when Finance Minister Nhlanhla Nene presents his medium-term budget policy statement in the light of lower than projected economic growth.

Webber Wentzel head of tax dispute resolution and tax controversy Nina Keyser told Parliament’s stand- ing committee on finance during public hearings on amendments to the Tax Administration Laws Act that in one case SARS requested interviews with more than 30 workers “regardless of whether they have any personal knowledge about the supposed scope of the audit”.

“We have also seen SARS requesting to interview an entire department of a company and heard of it requesting interviews with factory workers and IT departments.”

The interviews were usually conducted by teams averaging eight officials, “which is extremely intimidating”, Ms Keyser said.

South African Institute of Tax Professionals president Keith Engel said he believed that SARS “was under a lot of pressure to reach targets” and its relationship with taxpayers was becoming increasingly antagonistic.

“Tax practitioners feel they are being investigated as criminals. Taxpayers feel that they are treated as if they are guilty until proven innocent. There is a definite breakdown in trust in the relationship,” he said.

Mr Lebelo said for most of the taxpayers, it was not true that the relationship had broken down.