The South African Revenue Service (SARS) has made it easier for South Africans to be prosecuted for tax mistakes., Businesstech News reports.
Previously, taxpayers could only be held liable for tax mistakes where it was done “wilfully and without just cause”, but the new tax amendment legislation has changed this.
The SARS Commissioner, Edward Kieswetter, said that this will bring tax laws in South Africa in line with international practice, and that these principles were previously part of South African tax law.
Said Kieswetter: “This is not introducing something which is completely new, it is simply regularisng, which was an oversight in the 2011 Tax Administration Act formulation.
“Many commentators, with some degree of sensationalism, are projecting a scenario where the state will have a free-for-all against taxpayers.”
But Kieswetter stated that South Africans need not worry, as SARS is still required to prove blameworthiness and this must be proven beyond a reasonable doubt.
Director at Werksmans Attorneys, Doelie Lessing, told Businesstech that the amendments to the tax law were met with much resistance from various stakeholders. The concerns are around the removal of wilfulness or intent, which would essentially remove all protections taxpayers have in the case of unintended mistakes.
The proposed amendments would have allowed SARS to bypass the requirement to prove intent on the part of the taxpayer.
According to Lessing, the final amended legislation has not done away with intent completely but has rather adopted a differentiated approach where the existing list of non-compliance offences has been split into two categories:
- Offences that require wilfulness, where the heavier burden of proof falls on SARS;
- Offences in respect of which “negligence” will suffice to trigger potential criminal liability.
Lessing outlined the different categories of offences in more detail below.
11 offences which could give rise to criminal liability, only if the taxpayer committed them with intent
- Submitting a false certificate or statement in relation to returns, records and reportable arrangements
- Issuing an erroneous, incomplete or false document
- Failure to reply to or answer truly and fully any questions put to the person by a SARS official
- Obstructing or hindering a SARS official in the discharge of duties.
- Refusal to give assistance during an audit or criminal investigation
- Holding oneself out as a SARS official
- Dissipating assets or assisting another person to dissipate assets in order to impede the collection of tax.
- Using any amounts deducted by way of employees’ tax for purposes other than paying it to SARS
- Issuing documents purporting to be employees’ tax certificates if not an employer or authorised to issue
- Declaring that the price chargeable in respect of supplies is subject to VAT, where in fact no VAT is payable, or charging VAT in excess of the VAT properly leviable
- Issuing more than one tax invoice, credit note or debit note in respect of a VAT supply
17 offences which could give rise to criminal liability, even if the taxpayer committed them without intent
- Failure to register for tax or to notify SARS of a change in registered particulars
- Failure to appoint a representative taxpayer or to notify SARS a change in representative taxpayer
- Failure to register as a tax practitioner if required to do so.
- Failure to submit a return or document to SARS or the failure to issue a document to a person as required under a tax Act
- Failure to retain records as required
- Failure to furnish information or documents requested, excluding information requested for revenue estimations.
- Failure to give evidence when required.
- Failure to comply with a SARS directive.
- Failure to disclose to SARS material facts required.
- Failure to comply with tax payments including third party payments.
- Failure to comply with withholding tax obligations when required.
- Failure to issue any employees’ tax certificates or to notify SARS of having ceased to be a registered employer.
- Failure by an employer to deliver to any employee or former employee any employees’ tax certificate or notify SARS of having ceased to be a registered employer
- Failure to submit provisional tax estimates.
- Failure to comply with the payment of VAT on imported services and otherwise. Failure to submit VAT returns and special records.
- Failure to include VAT in the advertised or quoted price or failure to separately indicate the VAT exclusive price and the VAT inclusive price.
- Failure to keep sufficient records as required.