Sars: the hidden enemy within

I’M GOING to guess that there are many other companies in our predicament, judging from the conversations I have had with people we do business with.

Nobody can deny that our country’s problems stem largely from poverty and unemployment. And government rhetoric, as shallow as it is, continues to promise jobs, growth, the death knell of corruption, and future prosperity. Let the government dream on – little do they realise that they have an enemy in their midst: Sars.

Our company spent 13 years investing in the development of a product, destined purely for export markets. We are a 100% export business using local resources, employing 40 people, directly and indirectly.

Our markets are highly competitive. Our margins are relatively small and, of course, we pay VAT on all our purchases, and therefore claim a VAT refund as our export sales are zero rated. Our VAT returns therefore always end with a credit due from Sars, which is pretty much our net profit, or less.

We understand that Sars needs to protect itself from fraudulent claims and is entitled to audit VAT claims. This does not worry us as we run a clean, legitimate business. However, we are now waiting (again) for a refund due for the VAT period ending May 2021 for the sum of R485 995. Without this money, we are unable to pay wages or creditors, let alone the provisional tax that Sars wants paid by the end of August, no doubt subject to penalties for late payment.

By law, Sars has 21 working days to respond to any submissions made after documents submitted after its call for an audit. Within that period, it must either ask for further documentary evidence supporting the VAT submission or, alternatively, pay the refund due. In our case, 34 working days have passed since we submitted the required documents.

Despite phoning them at least three times per week to enquire, they cannot tell us why we have not received our refund.

“It has been escalated” doesn’t help us. The last person I spoke to said: “It is unfortunate, but we cannot do anything further.” (Telcon with Sars August 23). What does this mean?

Is it fair that if we pay VAT one day late, we are fined, but if Sars does not respond within its due, legally specified period, there are no consequences?

So now, without our refund, we must make a decision whether to close the company or not. Shareholders are not willing to further fund a company that is not profitable without Sars’ due refunds; banks are not either. Does this mean closure and the lives of 40 families now without income?

So much for government support for small business and the promotion of employment!

We beg a response to this stupidity. August 24 addendum: 37 days (their SAL is 21 days) after not responding to our submission of schedules requested by Sars and relevant documents, or refunding funds due to us, we received on August 24 a duplicate of their original request to submit the same information as requested by them on June 28, giving us 21 days to respond.

This is nonsensical and an embarrassment to whoever authorised this request. I don’t want to believe that Sars’ staff are stupid or incompetent, but this beggars belief.