A stiff new penalty regime for importers and exporters who break tax laws and stronger "pay-now-argue-later” powers for the SA Revenue Service (SARS) have been introduced in the new Customs Control Bill. Released for a second round of comments in April, the bill provides for five categories of penalties to be imposed on taxpayers who breach the law and has changed the way disputes between SARS and taxpayers will be resolved.
"The bill contemplates allowing SARS in certain circumstances to simply issue a notice to a taxpayer alleging a breach of the law and demanding that the taxpayer pay a penalty of up to one million within five days of the notice being issued,” explains Alison Wood, a director at Werksmans Attorneys. "Taxpayers must pay this amount or face prosecution.” While SARS does still provide for internal processes of appeal and dispute resolution, under the Customs Control Bill taxpayers can only appeal the amount of the fine for certain types of penalties, and not the merits of their liability. "In addition, SARS does not necessarily have to prove the offence if there is no criminal prosecution,” says Wood. "Yet the penalties can be enforced by SARS' legislated processes to ultimately have the same effect as a judgment debt, without SARS ever having to issue summons.”
The bill also seeks to give more structure and depth to SARS' powers of seizure and confiscation of assets, again without proof of an offence. The Customs Control Bill has been drafted to serve as a "platform” for the implementation of all other tax laws that are concerned with goods imported or exported from SA.
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.