An investigation by Tax Ombud, Judge Bernard Ngoepe, found that complaints of the alleged delayed payment and even payment avoidance by the South African Revenue Service (SARS), of income tax and VAT refunds, were justified.
Taxpayers should be wary and offer SARS no excuse to make justifiable delays. While many complaints have been found to be justifiable, they are not illegal, and there are steps that taxpayers should immediately implement when preparing and submitting tax returns to remove any excuse SARS may have for delay.
The judge identified various mechanisms SARS uses to delay payment, such as the unwarranted placing of Special Stoppers on refunds.
The sorts of delays practiced are rationalised as being to combat fraud, in certain circumstances, but appear to be systemic in nature. There has also been a dramatic increase in the number of cases in which SARS requests supporting documentation. Our experience among our clients is that where there is an income tax refund due, there’s a 60% to 70% chance that there will be a request for supporting documents and certificates.
It can take SARS as long as 60 to 90 days to review those documents before releasing the refund.
What to do
To avoid this scenario, there are some simple steps which we recommend taxpayers adopt to limit the opportunity for SARS to frivolously request such documents.
The most important of these is…
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Read this article by Ziyaad Moosa, Partner, PKF Octagon, as well as a host of other topical management articles written by professionals, consultants and academics in the February/March 2018 edition of BusinessBrief.
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