Sars focus on cash businesses
25 April 2016
Posted by: Author: Barbara Cole
Author: Barbara Cole (IOL)
The South African Revenue Service (Sars) is continuing its crackdown on cash businesses – the blitz has already raised R600 million – and a chunk of that outstanding tax has come from KwaZulu-Natal.
Sars is unable to provide the exact KZN share of the R600m collected as part of the countrywide audit so far, "as the process is still ongoing,” a Sars spokesman told the Daily News.
The nationwide blitz on non-compliant cash and carry businesses started in December and kicked off in Gauteng, with more than 100 on-site inspections having been carried out over the last month.
The campaign would be expanded in the next few months, with inspectors continuing to visit businesses which have been risk-profiled, the spokesman said.
"However, Sars intends to reach all cash and carry businesses identified. This will be an ongoing feature in the Sars strategy to ensure and enforce compliance across all identified sectors,” he said.
Private sector tax experts welcomed the crackdown when it was announced, saying that for too long Sars had focused on large taxpayers, while paying insufficient attention to SMMEs and the informal and cash economy, as enforcement was more difficult.
But last week the Sars commissioner, Tom Moyane, emphasised that the revenue service was closing in on those who under-declare on their tax liability – and this included "both individuals and companies.”
The on-site inspectors perform compliance checks to identify registration, filing non-compliance, and then flag any suspicious businesses.
So far, 50% of these businesses visited are non-compliant in registration, filing or payment.
There is a significant risk of under declaration due to poor record-keeping and high volumes of cash transactions, Sars points out.
Relevant penalties are being applied where applicable, and there could be criminal prosecution in cases of gross negligence and/or intentional tax evasion.
While Sars is focusing on the cash and carry sector, a call has also been made for all businesses in the country to start regularising their tax affairs.
This article first appeared on iol.co.za.