Tag: taxpayer

The premise of Tax Freedom Day is relatively simple to understand. It takes the total amount of taxes paid and divides it by the number of individuals in that jurisdiction to calculate how many days it would take them to pay those taxes. The first day of the year when all the income would remain with its owner is Tax Freedom Day.

Election season is coming up soon in South Africa, and those with governmental power have started promising jobs to the millions who are unemployed. Yet anyone who has an inkling of economic knowledge would know that the politicians are writing cheques with their mouths, and that they will be unable to cash their actions.

South Africa’s tax laws were designed for a high-income society – a result of a long history of the country accommodating a small, wealthy economy, and a large, poor one. But for a country with tens of millions being either unemployed or receiving very little income, being one of the world’s highest-taxed states does not make sense, particularly when small business growth is so crucially important to our economic future.

Expatriate taxpayers awaiting approval of their non-resident status may be surprised to discover that South African Revenue Service (SARS) can track their flights into and out of South Africa. This is evident from the attached Request for Additional Supporting Documents letter, received by one of our clients.

In recent times, tax authority queries resulting in transfer pricing adjustments have increased significantly, both globally and in Africa. Often, the outcome of a transfer pricing benchmarking study is an arm’s length range rather than a specific margin or price, and the question arises as to which point within such a range is appropriate and therefore arm’s length?

When it comes to non-compliance, the South African Revenue Service (SARS) takes no prisoners, and has the full backing of the presidency, in its drive to stop tax evasion and other fraudulent activities related to the fiscus, with President Cyril Ramaphosa praising the revenue authority’s efforts in tackling tax dodgers and those benefitting from criminal proceeds.

Congratulations SA taxpayers - you've paid government - now what you earn is yours!

In recent weeks we have seen first-hand the powers of SARS in holding taxpayers criminally liable where their tax affairs are not in order.

The realisation came when I least expected it. We had been out of South Africa for five years when we met my parents, siblings and their families for a family holiday. Our children by then had gained New York accents and were stylishly attired in their overpriced fashion items, whilst the nieces and nephews marauded through the hotel in their 'Naartjie' outfits that were more akin to pajamas than to fashion.

Provisional tax season brings with it the heightened panic of many taxpayers upon the discovery of penalties and interest suddenly imposed by SARS. The disgruntled taxpayer seeks immediate recourse through his attorney, hoping for some sort of justice to be served, but alas the attorney is worn down by complex tax calculations, the onerous and incessant engagement with the South African Revenue Service (SARS) and the ambitious endeavours to deliver a favourable outcome to their client.