An Opportunity To Come Clean
02 January 2012
Posted by: Author: Vlok Symington
An Opportunity To Come Clean
The Minister of Finance Pravin Gordhan announced in his Budget Speech on 17 February 2010 that legislation would be prepared to introduce a Voluntary Disclosure Programme (VDP) that would be effective from November 2010 to October 2011.
In his Medium-term Budget Policy Statement (MTBPS) on 27 October 2010, he said the following:
"Our capacity to pursue those who seek to evade tax obligations continues to be reinforced.Tax authorities the world over are co-operating more than ever before to throw open the veil of tax manipulation.South Africa has double taxation agreements with 70 jurisdictions which provide for extensive exchange of information between tax authorities.In addition, tax information exchange agreements have been agreed at officials’ level with six financial centres and a further 16 agreements are being explored.A joint audit made possible through these agreements has already yielded R3 billion in additional revenue.Combined with the growing availability and accuracy of third party data from financial institutions, employers and other sources, there are very few places for the non-compliant to hide. We are, however, offering another opportunity for taxpayers to come clean and join the ranks of full participation in our democracy.The Voluntary Disclosure Programme, which allows for the waiving of penalties of up to 200 per cent for those who make a full, honest and voluntary disclosure of prior evasion, will begin next month.”
The aim of the VDP is to encourage applicants to disclose their defaults and to give them the opportunity to regularise their tax affairs (Tax VDP) and/or any contraventions under the Exchange Control Regulations (Excon VDP).The overall VDP has two elements to it:
•The Tax VDP that will be administered by the South African Revenue Service (SARS) is being implemented in terms of the Voluntary Disclosure Programme and Taxation Laws Second Amendment Act (Act No. 8 of 2010)
•The Excon VDP that will be administered by the Financial Surveillance Department (VDP Unit) of the SARB.The Voluntary Disclosure Programme closed on 31 October 2011.
TaxTalk approached SARS with some questions about the success of the VDP.Here is what it had to say.Our questions were answered by Vlok Symington,executive officer, product oversight,legal and policy division, South African Revenue Service.
TaxTalk: How successful was the VDP, and are there any statistics available to publish?
From a SARS point of view, we are satisfied with the number of applications received during the VDP window period.The number is in excess of 17 000.Successful applicants will also now be able to regularise their tax affairs.
TaxTalk: We have heard that there were some glitches with the efiling system on the last night of the VDP and that some taxpayers were unable to file their VDP request.May we have your comments on this please?
The eFiling system ran smoothly on the last day and was available until 00h00 on the last day. The system was monitored constantly to make sure that enough broadband was available at all times. In addition,the VDP call centre and e-mail facilities remained open until 00h01of the last night.Some applicants realised too late that they were not registered for the particular tax product one Filing, which resulted in an error message on eFiling.This is not an eFiling glitch, but a failure by the applicant to register for the tax product. We also had persons applying via a different eFiling profile than the one on which they are registered.This would also have resulted in the system not accepting the application. These are good governance measures, which are inherent features of every system that SARS makes available.
TaxTalk: In the case of a taxpayer not being able to file their request due to a glitch in the system, what would these VDP applicants do?
No applications post 31 October 2011 can be considered.As mentioned above, there was no issue with the system.Applicants who used the application route through a SARS branch office (which during the whole of the VDP’s 12-month period was available if the applicant was not ready to use e-Filing) were processed in time.
TaxTalk: If your position is that you cannot by law accept late submissions due to a SARS computer glitch, what remedies would the taxpayer have?
As mentioned above, there was no issue with the system.
Source: By Vlok Symington (TaxTalk)