Requests for tax clearance certificates on the rise
26 October 2012
Posted by: SAIT Technical
By Amanda Visser (Business Day)
Executive summary (SAIT Technical)
Tax clearance certificates are often used as a determinantof "good standing” when the state had to decide whether to award a government tender or not. Requests for tax clearance certificates have increased to more than 600,000 a year. Changes in the in the system to request such certificates will be implemented at the start of next year, as there were instances of corrpution in the process of issuing certificates.
REQUESTS for tax clearance certificates from the South African Revenue Service (SARS) have increased to more than 600,000 a year.
Finance Minister Pravin Gordhan said in the medium-term budget policy statement speech that tax compliance was used as a determinant of "good standing” when the state had to decide whether to award a government tender or not.
Tax clearance certificates are a necessary tool used by the government to determine the tax compliance of a company, yet there had been corruption in the process of issuing the certificates.
Mr Gordhan said SARS had developed an electronic mechanism for taxpayers to provide real-time, up-to-date and continuous tax status information to interested parties.
The use of a unique one-time access PIN would significantly reduce the scope for fraud and abuse of paper-based tax clearance certificates, he said.
The changes will be implemented at the start of the next financial year.
Mr Gordhan said 3.4-million taxpayers had to date filed their annual income tax returns for the 2011-12 tax year.
He said there had been an increase of 24% in the number of taxpayers filing their returns since the start of the tax season this year, compared with the same time last year.
The number of registered individual taxpayers had increased to 13.7-million this year, with individuals contributing 33.8% through personal income tax to the fiscus.
Mr Gordhan said a growing number of taxpayers were submitting their returns using the latest mobile technology, introduced this year.