Kieswetter said the quality of tax advice from some of those who should be held to a higher standard of compliance left much to be desired, thus taxpayers should take care when they approach tax practitioners by doing their own due diligence. Picture: Timothy Bernard / Independent Newspapers.
The South African Revenue Service (Sars) has embarked on a process to revoke the licences of more than 50 tax practitioners as a result of general compliance failures.
At the announcement of the Sars revenue collection for the 2024/24 financial year, Sars Commissioner Edward Kieswetter today said delinquency among tax practitioners was still a big concern for the revenue service.
Kieswetter said the quality of tax advice from some of those who should be held to a higher standard of compliance left much to be desired, thus taxpayers should take care when they approach tax practitioners by doing their own due diligence.
“We have identified 53 tax practitioners who remain non-compliant in their own taxes, which explains in part how they advise their clients and why their clients are equally delinquent,” Kieswetter said.
“Sars has commenced the process to have their licences revoked. And to date, eight licences have already been revoked, while some of them have been identified for further criminal investigation.
“In one law firm alone in Sandton, we found 14 partners of this law firm who underestimated their own provisional taxes, and we had to approach using paragraph 19(3) to request top-up payments. Again, people we should be holding to a higher standard.”
Paragraph 19(3) of the Fourth Schedule allows the commissioner to call upon the taxpayer to justify the estimate, or to furnish particulars of income and expenditure or any other particulars that may be required for that year of assessment in respect of which the provisional tax payment is being made.
Kieswetter also said Sars has stepped up its vigilance when receiving approval requests for international transfer via practitioners due to the increase in illicit financial flows.
He said many of these have resulted in full-scope orders, and this will in future place a lot more focus on firms that promote certain schemes.
“The second area is tax exempt institutions including NGOs and NPOs. The level of abuse and low compliance in this area remain a huge concern, including being used as vehicles for money laundering and tax crimes,” he said.
“There are people who create an NPO for money laundering or to commit tax crime. In fact, the Financial Action Task Force has highlighted that as one of the objectives we need to resolve if we want to come off the greylisting, specifically the use of NPOs.
“We have taken steps to enhance risk detection and risk mitigation capabilities. And this year, just in this segment, we disallowed R1 billion of impermissible claims that were presented to us as donations.
“Regulatory changes have also been introduced. One dealing with the additional reporting information required, on tax deductible receipts issued by the approved section 18A organisations and others, calling on these organisations to submit third-party data to Sars with effect from May 2024.”
As at the end of March 2024, Sars had collected a record gross amount of R2.155 trillion, year-on-year 4.2% against the nominal GDP of 4.9%, and paid out refunds of R414 billion to taxpayers, the highest-ever quantum in refunds compared to R381bn in the prior year.
This brings the collected net amount to R1.741 trillion, which is almost R10bn higher than the revised estimate and R54bn more than last year’s R1.687 trillion.
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