Tax errors may become a crime
PROPOSAL: REVENUE SERVICE WANTS TO ‘REMOVE THE REQUIREMENT OF INTENT’
Seeks a blunt tool to remove a higher burden of proof that an action was ‘wilful’.
In the preamble to the latest Tax Administration Bill, the South African Revenue Service (Sars) has indicated it proposes to “remove the requirement of intent from certain criminal offences”.
In what has become Sars’ attempt at a “tough stance” to scare taxpayers into compliance, it has taken a blunt tool to remove a higher burden of proof that an action – or an omission – had criminal intent.
Sars has already decided that any action or omission was “wilfully done”, and is therefore criminal. So why should it waste time in trying to determine this?
It seems in Sars’ book, taxpayers cannot make an honest error (naturally this doesn’t apply to its own staff).
Sars wants to remove the requirement that the action must have been done “wilfully”.
Sars has in the past attempted to “utilise the criminal offence provisions to extract funds from people”. However, to be successful, it had to clear the “wilful intent” hurdle, which requires a heavier burden of evidence.
What Sars is seeking to do is to criminalise mistakes.
Paragraph 30 (employees’ tax offences) of the Fourth Schedule to the Income Tax Act (TAA);
Section 58 (offences in regard to compliance) of the Value-Added Tax Act; and
Section 234 of the TAA.
The amendment to Section 234 of the TAA now changes an error that can be made by anyone into a criminal act, such as: the failure to notify Sars of a postal address, a physical address, banking particulars used for transactions with Sars, an electronic address used for communication with Sars, or such other details as the commissioner may require by public notice.
Further, it provides that Sars may register and allocate a taxpayer reference number to a person who is not registered.
In the Draft Memorandum on the objects of the Tax Administration Laws Amendment Bill, Sars reasons that it is not possible to “wilfully” neglect something, and that failing to do something required by the Act could be “problematic”.
This is patently wrong and looks like Sars is misstating the position, in order to make the proposed (unfair) amendment seem more reasonable.
The National Prosecuting Authority is of the view “that the current wording ... substantially undermines the ability of Sars to ensure compliance based on the objective standard expected of the reasonable person”.
“Consequently, this may hamper the criminal prosecution of non-compliant taxpayers.”