Sars, have you taxed that Aston Martin?

The public has been aghast at the ongoing revelations at the Commission of Inquiry into State Capture, where implicated persons are quite comfortable admitting to having received a R2.6 million Aston Martin sports car as a gift, or security equipment, or the use of a rental car ...

The South African Revenue Service (Sars), however, appears neither shocked, nor horrified.

Sars’ attention is elsewhere, last week stating it had won a court judgment against a company called Carte Blanche on a technical matter.

And it “noted the judgment” in the matter related to the seizure by its customs officials of a Lesotho-registered vehicle in the Free State town of Ficksburg – and the arrest of its owner – in May. Sars lost that case, as adequately covered by Moneyweb journalist Ciaran Ryan last month.

Sars Commissioner Edward Kieswetter has frequently been quoted warning tax dodgers of consequences. He has also said Sars was endeavouring to improve compliance, based on the notion that making it easier for taxpayers to comply would reduce the level of noncompliance. Sars has also been going after value-added tax (VAT) fraudsters and has put some in jail.

But all of the above is focused on those who are in the system. Why does Sars not get to grips with those who aren’t?

And where are the lifestyle questionnaires?

The Income Tax Act is quite clear on the deductibility of bribes or illicit payments: there is no deduction for any amount or payment (or agreement or offer) that “constitutes a corrupt activity”.

Sars would claw back some credibility if it systematically raised tax assessments on every single gift-receiving “implicated person” before the commission.

Sars can also demand the identity of the magnanimous friends and relatives who are dispensing expensive gifts, so that they can be charged with donations tax (plus penalties and interest).

But perhaps Sars and National Treasury can take the bull by the horns and legislate for the taxation of any asset that magically appears in the home of a politically connected person.

Nowadays we see no action being taken against the recipients of the illicit proceeds from state capture. – Moneyweb