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Tax Compliance – Keeping abreast of recent changes at SARS

Thursday, 23 April 2015   (0 Comments)
Posted by: Author: BDO South Africa
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Author: BDO South Africa

Everyone has a vested interest in tax compliance

The South African Revenue Services (SARS) has engaged in a five-year tax compliance programme spanning the tax years 2012/2013 to 2016/2017. Ilsa Groenewald, BDO's Associate Director for Tax, takes a closer look at the current state of affairs.

"SARS' primary aim is to ensure that tax compliance is a shared national priority for all South Africans,” Groenewald says. "Their message is that everyone has a vested interest and a stake in tax compliance and that all sectors of society should join hands and work together towards achieving a tax moral society with integrity, honesty and equality as its core values.”

Why a focus on tax compliance? Tax compliance is critical since ensuring that taxpayers and traders, along with intermediaries like tax practitioners and clearing agents, meet their tax and legal obligations spreads the tax burden and enables long term sustainable growth and social investment.

Continued education and communication by SARS to all stakeholders is a critical component of this process. SARS has, over the past decade, conducted various workshops and prepared guides and brochures to educate the general public, business sector and professional tax practitioners.

"For example, SARS has made huge progress in simplifying the tax and customs processes by introducing e-filing,” Groenewald says. "This enables taxpayers to meet their tax obligations in a relatively easy and cost-effective manner.”

"Continuous motivation of and by registered tax practitioners is also a critical component. As tax practitioners, we need to remind our clients why they are paying tax and that tax laws exists to protect the country from unwanted, harmful and illegal goods, and to ensure sustainable economic progress.” Groenewald is of the view that the majority of South African taxpayers are now compliant and accept their responsibility, which is a marked change over the last two decades or so.

"Those who are less inclined to be compliant should be aware that, with the introduction of the Tax Administration Act, SARS is now able to identify and collect outstanding income taxes and indirect taxes such as PAYE and VAT much more effectively and efficiently,” she adds.

"Whilst the overall tax compliance climate in South Africa has improved, South Africans need to continuously focus their efforts on sustaining diligent tax compliance and creating a countrywide culture that is conducive to full compliance by all taxpayers. Tax evasion is no different from any other crime and together we can create a society with healthy tax habits.”

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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.

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