By Dirk Kotze (Moneywebtax)
A list of some of Sars' focus areas.
Treasury was in the fortunate position to announce that collections for the fiscal year 2012 exceeded the budget by approximately R4 billion. Hopefully this indicates that the economy is making a come-back, honest taxpayers paid what they owed and Sars' enforcement actions in respect of delinquent taxpayers have borne some fruit.
On that point, Sars released a booklet on its so-called Compliance Programme 2012/2013 - 2016/17, which sets out focus areas for enforcement and improvements in tax and customs compliance.
In the introduction to the booklet, Sars Commissioner Oupa Magashula says that publishing its focus areas will help taxpayers recognise where they are at risk.
It's important to understand that non-compliance in respect of taxes will have real consequences.
According to Sars, it has successfully prosecuted 230 taxpayers since April 2011, which has led to a combined 370 years of jail sentences and R5 million in penalties. A further 1500 tax related cases are also currently being considered by the National Prosecuting authority.
Becoming and remaining compliant is therefore paramount. Some of Sars' focus areas that taxpayers should take note of:
- High net worth individuals and related trusts:these taxpayers are individuals who should on average contribute R1.7m in tax per annum. To date a potential 456 wealthy individuals have been identified who are not even registered for tax and of those on register the main area of non-compliance stems from related trust structures where under-declaration of income is the main area of concern.
- Large businesses and transfer pricing: this topic remains on the radar and Sars is planning to increase its resources as well as its communication with other tax jurisdictions on this issue. Compliance with provisional tax payment rules will also be monitored and enforced.
- The construction industry:focus will be on persons who are awarded Government tenders as well as the tax aspects regarding the various sub- contractors involved in paving, tiling, painting etc.
- Small businesses:it was found that compliance levels are still low, and VAT fraud is prevalent. Increased VAT audits on small entities can be expected.
- Tax practitioners and intermediaries:this industry will become more regulated to ensure that tax practitioners themselves are tax compliant and practitioners will be profiled to identify high risk persons.
- Customs:the trade and consumption of illicit cigarettes will be monitored as well as the continued undervaluing of imports for import duty purposes. Increased co-operation with other tax jurisdictions and trade data collectors will also be on the agenda.
All in all the Compliance Programme seems fairly focused on certain types of taxpayers. But don't expect Sars to simply forget about the rest. On the contrary, the Receiver will continue its regular audits and investigations, to the benefit of compliant taxpayers and the fiscus.