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SARS National Operational Meeting: 3 December 2013

12 December 2013   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

1. Welcome and apologies

The chairperson opened the meeting, requesting all attendees to introduce themselves and welcomed everyone present.

2. Confirmation of agenda

The agenda was confirmed and new items added.

3. Confirmation of previous minutes

The meeting agreed that previous meetings minutes would not be considered at this time unless there were major issues with the minutes.

4. NEW AGENDA ITEMS

4.1 PAYE withholding on the vesting of equity instruments after close of payrolls

RCBs are essentially calling for a legislative change. A submission to that effect has already been made to SARS Legal and Policy by Sharon Smulders from SAIT. RCBs were advised in the meantime to treat the matter on a year of assessment basis.

Responsible

SARS Legal and Policy & RCBs

4.2 Interest owed by SARS to taxpayers - s26 of the TAA

SARS previously issued such IT3s. This process however had its own challenges. Currently interest owing is reflected on the statement of accounts. Returns are not prepopulated with interest owed. SARS Legal and Policy should look at a structured legal provision to deal with this matter. RCBs are to submit examples of cases that demonstrate these facts. SARS Communications to develop communication on interest paid by SARS to inform taxpayers of the process in place.

Responsible

SARS Legal and Policy; SARS Communications and RCBs

4.3 Appointments with the SARS branches / No shows

This matter was covered at the regional meeting and resolved. SARS mentioned that it will be opening additional Tax Practitioner Units in Randburg; Cape Town (South of Lower Long) and Soweto.

On the issue of "no shows” for appointments with the TPU; penalties (the affected tax practitioner will not be allowed to make an appointment with the TPU for two months following the missed appointment) has been agreed at the regional meetings with the RCBs.

SARS will start denying service to tax practitioners not registered in terms of Section 240 of TAA at the TPU offices. As there is currently no electronic system to verify the status of tax practitioners, SARS branch offices will operate from an alphabetical list of tax practitioners that are currently reflected as registered in terms of Section 240 of TAA.

A proposal was made for SARS to consider issuing tax practitioners with ID cards. The SARS response to the proposal was that due to ease of duplication of the cards, a system validation process was preferred. SARS noted that this was envisaged but could not be implemented immediately. 

SAIPA shared a concern around the lengthy response times experienced with the TPU on matters logged with them. SAIT and the Executive for Region 1 are to take this matter up with the Head of the TPU. Some tax practitioners have complained about the technical skills levels of the SARS consultants at the TPU that leads to time wastage due to SARS staff not completely understanding the tax issues at play. SARS noted that further training for TPU staff especially around VAT registrations was in place and should help with the time delays. RCBs were requested to bring to SARS attention other examples of skills shortage experienced at TPU.

SAIT reported an incident experienced with the SARS call centre where the taxpayer was incorrectly advised and as this advice was directly from SARS but conflicted with that of the taxpayers’ tax practitioner – the taxpayer accepted the SARS advice – and resulted in the tax practitioner losing this particular client. Noted that this was regrettable but SARS acknowledged that skill levels at call centres were being addressed. A further proposal was made for SARS to consider cleaning up its register especially looking at the disparity in terms of the re-registration or verification figures. The SARS database had in excess of 30 000 tax practitioners listed before Section 240 of TAA was in place. Currently 11 405 tax practitioners have verified their details with SARS in terms of the above legislation. It was noted that the discrepancy in numbers could be due to the fact that the revised Act that talks to individuals working under the direct supervision of a tax practitioner no longer requiring them to be registered with SARS as tax practitioners. To address the issue raised, RCBs are to agree on a letter that will be drafted by SARS Segmentation and Research to be issued to tax practitioners relating to people working under the direct supervision of a tax practitioner.

Responsible

SARS TPU; SARS Branch Operations and Segmentation and Research; SAIT; Executive Region 1 and Head TPU and SARS Operational Service Escalations

4.4 Procedural difficulty in obtaining refunds and interest on refunds from SARS – section 45 of the VAT Act

The RCBs essentially asked for interest to be automatic. SARS indicated the request is un-procedural when considering terms and conditions related to this transaction. SARS committed to looking at an eFiling facility where objections can be filed.

Responsible

SARS Operational Service Escalations

4.5 VAT registrations

SARS acknowledged the challenges with VAT registrations noted that Treasury is still working on the related legislation. RCBs spoke to the impact of this VAT registration process and SARS retrospective VAT claim (even where no VAT has been charged) on small business. VAT should be payable from date of registration and not the date of application to ensure correct procedure and to cater for time delays in the process. RCBs have been asked to share some of these cases studies with SARS and to make a submission for proposed changes to the current legislation.

Responsible

RCBs

4.6 Potential problems with credit push

RCBs reported that they are currently experiencing problems with all the banks on the credit push facility. SARS acknowledged the issues raised; but noted that these difficulties were due to banking procedures and not SARS processes. SARS indicated that all payments are due to SARS on the last working day of the month. If EFT payments, rather than credit push mechanism is used, the tax payer may miss the SARS deadline. SARS will give credit only on the day that the money is received. SARS held discussions with the bigger banks on the issue of them providing a mechanism for future payments. SARS can confirm from these discussions that the future payment facility will not be available for the month of December.

4.7 eFiling time outs

RBCs reported that the eFiling system ‘time-outs’ even whilst information is being loaded. Examples shared are when completing N001s and IT14s. It is also reported that the automatic save functionality does not seem to be working properly as in some cases information captured is not saved.  SARS committed to investigate this matter.

Responsible

SARS Operational Service Escalations

4.8 IT12 – Farming Income

This will not be changed for now.

4.9 IT12TR – Trust Returns

The Executive Core Tax Operational Service Escalations is to circulate the new form to RCBs for inputs. No date has been set for implementation. However, SARS is looking at possibly the first six months of next year for implementation.

Responsible

SARS Operational Service Escalations

4.10 TCC Applications

All TCCs will go into a ‘failed status”. SARS will be moving to an auto-approved system where approvals will be done up front. These cases will be dealt with by SARS Compliance Operations. Some of the current challenges are the fact that branches of the company applying for TCCs fill in the details for the compliant branch and not the details of the Legal entity. The legal entity is what SARS will use to check compliance and not branch level. SARS will no longer issue TCCs at compliant branch level.  

On the issue of debt older than 5 years – debt is different from outstanding returns and is therefore treated differently. Taxpayers are to request a compromise as SARS cannot ignore the debt. Debt currently has a 15 year recovery period according to the new TAA.  RCBs have been asked to resubmit a submission previously made on this issue.

4.11 Changes in ID numbers

On trusts specifically there is no difference at Masters level. Looking at companies, SARS is working with CIPC and one of the questions we are raising is; do we allow ourselves to make changes? This is still being considered.

SARS shared the process to be followed where the last three digits of a ID number changed:

  • Taxpayers are to go to the SARS branch office
  • Changes can be made on the system with your submission
  • SARS looking at changing programmatically
  • SARS to consider changes on the IT12.

RCBs raised a number of concerns with emails received from SARS that are not referenced. They also raised the issue where IT34s are issued without SARS notifying taxpayers. RCBs have been asked to report such cases to SARS.

Responsible

RCBs

4.12 SARS Communication with Tax Practitioners 

Stakeholder Management is responsible for issuing all SARS communication to RCBs.  

4.13 SARS participation and attendance of conferences hosted by RCBs

All RCB requests for SARS participation or attendance of conferences are to be sent to SARS Stakeholder Management for processing.

Responsible

RCBs

4.14 Report on Compliance levels of tax practitioners

Letters were issued to about 3000 tax practitioners. 2000 tax practitioners were found to be non-compliant with tax debt in the region of R80m. SARS will further analyse this figure to discern current and old debt.  

Responsible

Segmentation and Research

5. URGENT MATTERS RAISED

5.1 Fraud on Efiling

When submitting a return you immediately received a message acknowledging receipt. This is however not the normal process. SARS indicated that it is aware of the issue and is currently investigating the matter. RCBs have been asked to share examples with SARS.

Another potential fraud issue is where a tax practitioner’s profile was blocked because of a change made by a "walk-in” person (other than the tax practitioner) at the Rissik Street SARS branch office. SARS again asked the RCBs to share examples of these cases with SARS.

Responsible

SARS Operational Service Escalations and RCBs

5.2 SARS Senior Official

This list is currently being ratified. 

5.3 Registration of new companies for income tax

The new interface is not working well. Companies are however still responsible for their registration. The SARS email notification for IRP6’s does not reflect the tax number or name and surname. SARS is committed to investigate the reasons why the email notification does not contain the necessary reference number. RCBs have been asked to share examples with SARS.

Responsible

SARS Operational Service Escalations and RCBs

5.4 Registration of a trust (even as Minors – Beneficiaries of a Trust)

SAIPA asked to submit examples.  

Responsible

RCBs

5.5 IRP5 codes for Medical Credits

The taxpayer is to file a return. Fringe Benefit contributions are to be brought up separately. SARS Legal and Policy to investigate further.

Responsible

SARS Legal and Policy

6. CLOSURE

The chairman closed the meeting thanking everyone present for their attendance and participation.



WHY REGISTER WITH SAIT?

Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

MINIMUM REQUIREMENTS TO REGISTER

The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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