By Lehlohonolo Lehana.
The South African Revenue Service (SARS) has apologised to taxpayers for sending out a ‘threatening’ SMS, warning them of legal action if they do not submit their tax returns.
Tax season for non-provisional taxpayers drew to a close on Monday (23 October). The SMS was sent out to representatives of companies regarding tax returns, including those that have been deregistered or have already submitted the requisite returns.
The message told these representatives to submit their returns within 10 days and then threatened them with legal action should they not comply.
SARS said the intended message was meant as a genuine and helpful reminder to taxpayers to file tax returns due and fulfil their legal filing obligation.
“While SARS is empowered by law to remind all taxpayers that are still registered with SARS of their legal obligation to file their relevant returns by the due date, SARS does not commence legal action before engaging with taxpayers.”
SARS said that a company is expected to file a return if it meets the following conditions:
- Derived gross income of more than R1 000;
- Held assets with a cost of more than R1 000 or had liabilities of more than R1 000, at any time;
- Derived any capital gain or capital loss of more than R1 000 from the disposal of an asset to which the Eighth Schedule of the Income Tax Act applies; and/or
- Had taxable income, taxable turnover, an assessed loss or an assessed capital loss.
Taxpayers who meet the above conditions must file their returns.
“Unfortunately, SARS’ reminders are ignored by some taxpayers, which means that their situation escalates to levels where legal action may be required. Even then, they are reminded about their obligation to file the outstanding returns, “SARS said.
SARS has reminded taxpayers that it remains their legal obligation to ensure that their tax affairs are regularised, where these are not in order.
“SARS will engage with taxpayers with respect to outstanding returns at the appropriate time. We need to be clear that taxpayers who continue to ignore reminders and fail to regularise their tax matters, in accordance with the law, will eventually have to answer for their continued non-compliance.
“Lastly, SARS appreciates the effort of honest taxpayers who diligently comply and fulfil their obligations. We value your valuable contribution to the important work incumbent on us.”
The threatening messages came soon after tax experts warned that SARS was under pressure to boost tax collection and would be turning its attention to tax representatives.
According to Tax Consulting SA, SARS has become increasingly aggressive in its tax collections this year, and tax representatives need to tread lightly.
The group said the revenue service has rapidly upskilled its debt management teams to collect from these entities, and notices of personal liability are already being sent out.
Tax Consulting noted that, historically, SARS was known to issue Final Demands and subsequent Demand Reminders, but this is no longer the case.