In light of the significant drop in the submission of tax returns and decreased compliance experienced by the South African Revenue Service (SARS), SARS has indicated in a media release, issued on 16 April 2018, that it has established a new initiative with the National Prosecuting Authority (NPA) to prosecute non-compliant taxpayers.
SARS has over the past few years experienced an increase in the non-submission of returns across all tax types, including Pay As You Earn, Value Added Tax, corporate income and personal income tax.
As noted, this SARS initiative with the NPA would extend across all tax. SARS has already had success with a similar court case and has additional cases related to non-compliance with taxes scheduled on the court rolls during April 2018.
It is important to note that taxpayers who are found guilty will end up with a criminal record. In the case of companies, the Public Officer, Taxpayer Representative or a Director of the company can be held legally accountable for any non-compliance with various taxes in South Africa. In practice, SARS will normally engage with taxpayers, prior to initiating any criminal case.
Aside from the legal implications discussed above, non-compliance may also attract penalties which can be imposed for each month that the non-compliance is not remedied after the statutory due date.
Taxpayers are encouraged to make use of the Tax Compliance Status (TCS) system on SARS e-filing to ensure that they are fully compliant. Obtaining tax clearance certificates from SARS can provide some assurance to stakeholders not involved in the tax compliance function.
EYG no. 02501-181Gbl
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