Various recent media reports commented on the planned changes to the tax legislation which could see common errors on tax returns resulting in jail time. “New draft legislation seeks to scrap the concept of “intention” from tax crimes – this means the prosecutors don’t have to prove that you wilfully broke the law, and the court can find you guilty of an offence even if you made inadvertent errors.”
“It would mean that you could be guilty of an offence if you neglect to, for example, notify SARS of a change in registered details (addresses, bank accounts and email addresses), a change in public officer, submitting a return or document to SARS, responding to a request for documents or information from SARS, maintain records or pay taxes when due,” according to a senior associate of Werksmans Attorneys.
Other common problems that could result in harsh punishment include:
|●||Supporting documents being misplaced, or clerical errors, which result in adjustments to VAT returns by SARS. As VAT is a self-assessed tax, any adjustments to the return inevitably results in the taxpayer having failed to pay VAT to SARS on time.|
|●||Late payments of VAT or PAYE by businesses, where a payment is only released late on a Friday night, and is not received by SARS until the next day.|
|●||Taxpayers that are unaware they may have a tax liability due to increasing complex provisions of the tax laws, and then fail to pay the correct amount of VAT or PAYE to SARS timeously.|
However, South African Revenue Service (SARS) Commissioner Edward Kieswetter has allayed fears that taxpayers will be imprisoned for minor mistakes on their tax returns. According to Kieswetter criminal prosecution is the last resort when it comes to tax non-compliance as SARS has a few other steps in place before resorting to court action.
A recent ruling is a clear intimation that SARS is shedding its Mr Nice Guy image. A firm was denied interest on VAT amounting to R71 million, based on the fact that it had omitted to indicate three payments to the value of just over R600. As they said in Hill Street Blues: Be careful out there.
Listen to Commissioner Edward Kieswetter in conversation with Kieno Kammies during a recent CapeTalk radio interview.
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