Latest news with #EdwardKieswetter
News24
8 hours ago
- Business
- News24
A VAT crash course, courtesy of 9 000 gold coins
A recent Tax Court judgment stands as a cautionary tale, write Megan Langton and Mornay Bornmann. • For more financial news, go to the News24 Business front page. South African Revenue Service (SARS) Commissioner Edward Kieswetter has spelled it out again after the May 2025 Budget Speech: SARS is committed to collecting significantly more tax this year. He warned that SARS will use all legal instruments to address non-compliance. Despite best efforts to educate and forewarn South Africans, there are still taxpayers and their advisors who make very expensive mistakes when challenging SARS. For delinquent taxpayers who take the risk, the reality is that this Commissioner is not making idle threats. The recent Tax Court judgment in Southern Africa versus SARS stands as a cautionary tale. The taxpayer lost its claim for a R26.9 million input VAT refund. This matter relates to 9 000 gold coins, weighing 358 kg and a customs value of R157 million, brought into South Africa. The taxpayer is a clearing agent operating on behalf of a third party (BIV). The judgment reads that both the taxpayer and BIV 'were under the mistaken impression that no importation VAT was payable on the importation of the coins'. The taxpayer did not initially declare VAT on the import of the gold coins, which entered through OR Tambo International Airport from the UK. SARS informed the taxpayer that gold coins are not exempt from VAT and that a Voucher of Correction (VOC) was needed to bring VAT into account. The taxpayer then passed a VOC to declare VAT, which SARS accepted. SARS later deducted R26.9 million in VAT from the taxpayer's deferment account. The matter was further complicated when the gold coins were subsequently exported back to the UK. However, SARS refused to accept a second VOC, intended to retrospectively cancel the original customs declaration on which the VAT was paid. The court was not impressed Failing to convince SARS to issue a refund of the import VAT, the taxpayer took their plethora of arguments to the Tax Court. This included claims that: The taxpayer qualified as a representative taxpayer or responsible third party entitled to the refund under sections 154 and 158 of the Tax Administration Act; No valid importation had occurred because the goods were later exported; and The taxpayer was entitled to an output tax adjustment under section 21 of the VAT Act. The presiding officer was Judge J Bam of the High Court, Gauteng Division. In a well-written judgment, the taxpayer's arguments were squashed, with the Court stating: Through the life of this case, the Commissioner has consistently informed the applicant of its position. The Commissioner cannot be forced to make a refund of VAT contrary to the provisions of the VAT Act. The Judge agreed with SARS's rejection of the refund on the basis that the taxpayer was not the lawful importer. This was because it was BIV, not the taxpayer, who was reflected as the importer according to all supporting documentation, the VAT registration number, and the accompanying import forms. In one of the most damning lines of the judgment, the Court concluded: The appellant has no case against the respondent. It never had. The taxpayer was ordered to pay SARS's legal costs, including the costs of two counsel. Applying for a simple VAT ruling from SARS prior to import would have clarified whether the agent could claim input VAT, and under what circumstances. The taxpayer and BIV could have imported the gold coins with no VAT risk. What is quite striking is not how the case failed, but how easily it could have been avoided. Megan Langton is a tax attorney at Tax Consulting South Africa, and Mornay Bornmann, attorney for cross-border taxation at Tax Consulting South Africa. News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.
Eyewitness News
a day ago
- Business
- Eyewitness News
SARS expects to see impact of increase in tax collection efforts from Q2
CAPE TOWN - The South African Revenue Service (SARS) said the impact of it ramping up its efforts to collect more taxes would be felt by the second quarter of this financial year. Treasury again warned Parliament on Friday that it would increase taxes next year in efforts to plug a R20 billion budget shortfall in the next financial year if SARS doesn't produce the money. SARS is receiving R7.5 billion over the next three years to bolster its capacity to collect more taxes, which it estimates could be as much as R50 billion a year. ALSO READ: • Expanding list of tax-free food items won't benefit poorer households: Treasury • Treasury defends fuel levy increase Last week, SARS Commissioner Edward Kieswetter, said the aim was to employ at least 1,700 more staff to allow it to go after those not paying taxes. On Friday, the revenue service's head of legislative policy tax, Franz Tomasek, told Parliament's finance committees it was still in the process of training and appointing more debt collecting staff. "Our initial focus is going to be on undisputed debt. But that will need to be underpinned by revenue recovery measures targeting the tax gap as we move into the outer years. The results will be reported monthly, and bearing in mind the ramp-up period, we are expecting those efforts to start gathering pace by the beginning of the second quarter of this year." Tomasek said he hoped these efforts would mean the finance minister would reconsider his intention to raise taxes next year.
The South African
4 days ago
- Business
- The South African
SARS cracks down on PAYE, what it means for you
The South African Revenue Service (SARS) is focusing on PAYE compliance. This is not just a routine check. Employers across the country must make sure their PAYE submissions are accurate and current, or they will face serious consequences. SARS is focusing more on improving revenue collection as the country deals with financial challenges. PAYE is now a top priority for recovery and enforcement. SARS is hiring 500 new staff members to help with its campaign. They plan to add a total of 2,000 people. Their goal is to raise R70 billion in extra revenue over the next three years. Most of this money is expected to come from addressing unpaid PAYE taxes. SARS PAYE compliance crackdown: The issue of accountability According to Business Tech, the issue of employer responsibility is very important right now. SARS has made it clear that there will be no tolerance for delays or mistakes with PAYE. Companies that do not comply could face penalties, audits, and even legal action. Finance Minister Enoch Godongwana has warned that the government will cut spending if SARS does not meet its revenue targets. As a result, collections from PAYE have become very important to help avoid these cuts. SARS Commissioner Edward Kieswetter has emphasised that this effort is not just about collecting revenue; it's also about rebuilding trust and improving the tax agency's systems. By focusing on SARS PAYE, they want to enhance transparency, accountability, and long-term financial stability. What does this mean for employers? SARS is serious about collecting PAYE, and this is not just a short-term effort. Employers must urgently check their payroll systems and make any needed corrections to stay compliant. SARS now has the resources and systems to enforce these rules effectively. Do you think SARS is doing enough to make sure employers follow the rules for PAYE? Or is this effort to enforce compliance overdue? Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
IOL News
5 days ago
- Business
- IOL News
Sars banks on 1700 debt collectors to close gap
Sars Commissioner Edward Kieswetter also said their commitment was that they expected to yield at least R20 billion from the Debt Recovery Project. Image: Screenshot: Newzroom Afrika The South African Revenue Service (SARS) is set to bolster its debt collection capabilities significantly, announcing plans to hire 1700 debt collectors in the 2025/26 financial year. This strategy is part of a concerted effort to improve revenue collection and recover debts in light of ongoing fiscal challenges. Commissioner Edward Kieswetter announced this while addressing the joint committees of finance and appropriations on Friday. 'We have already employed 500, used the month of April and early May to train them, to induct them, to get them going, and they will now start collecting debt. In addition to that, next week, June 1, we will bring in a further 250 and continue to ramp that up,' he said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading Kieswetter also said their commitment was that they expected to yield at least R20 billion from that Debt Recovery Project. 'But our aspiration is to go much closer to R50 billion as far as that is concerned. So you should see next year a significant step up ahead of inflation, just on the debt recovery.' In his Budget, Finance Minister Enoch Godongwana allocated R7.5 billion to the SARS over the next three years to increase the effectiveness in collecting more revenue. National Treasury's Budget documents said the funding will focus on using technology, data science, and artificial intelligence to improve efficiency and transparency in tax administration. Kieswetter said the current revenue projection did not include the current projection of revenue that will be derived from the Focus Debt Recovery Project. 'The minister has indicated that over the next six months, as he builds confidence, it will provide him the opportunity to consider how much of that he would like to include, both in the in-year but also out-of-year budgets.' He told the MPs that the Debt Recovery Project had a ring-fenced allocation in the previous financial year to focus on revenue recovery. 'Some of that we applied very specifically to debt recovery, spent just over R300 million in the last financial year, and we were able to employ just short of about 760 additional employees on a project basis, train them up, and get them to use our systems.' He said the cohort of debt collectors hired last year delivered just short of R25 billion that was included in the revenue outcomes of last year. SARS's final unaudited revenue outcome for 2024/25 stood at R1.86 trillion. Kieswetter said the first year of the debt recovery project has confirmed their view that revenue administration was integral to the fiscal integrity of South Africa and should not be taken for granted. Commenting on the modernisation of SARS, he said it was integral to the quality, the efficiency, and the effectiveness of their compliance programme. 'A significant amount of that is the work that SARS performs through auditors, investigators, and debt collectors to follow up not only service-related issues, but also non-compliance-related issues. Cumulatively, that work yields additional revenue, which, if not done, will not be collected.'
IOL News
24-05-2025
- Business
- IOL News
SARS aims for R50 billion as it hires 1,700 debt collectors
Sars Commissioner Edward Kieswetter also said their commitment was that they expected to yield at least R20 billion from the Debt Recovery Project. Image: Screenshot: Newzroom Afrika The South African Revenue Service (SARS) is set to bolster its debt collection capabilities significantly, announcing plans to hire 1,700 debt collectors in the 2025/26 financial year. This strategy is part of a concerted effort to improve revenue collection and recover debts in light of ongoing fiscal challenges. Commissioner Edward Kieswetter announced this while addressing the joint committees of finance and appropriations on Friday. 'We have already employed 500, used the month of April and early May to train them, to induct them, to get them going, and they will now start collecting debt. In addition to that, next week, June 1, we will bring in a further 250 and continue to ramp that up,' he said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Kieswetter also said their commitment was that they expected to yield at least R20 billion from that Debt Recovery Project. 'But our aspiration is to go much closer to R50 billion as far as that is concerned. So you should see next year a significant step up ahead of inflation, just on the debt recovery.' In his Budget, Finance Minister Enoch Godongwana allocated R7.5 billion to the SARS over the next three years to increase the effectiveness in collecting more revenue. National Treasury's Budget documents said the funding will focus on using technology, data science, and artificial intelligence to improve efficiency and transparency in tax administration. Kieswetter said the current revenue projection did not include the current projection of revenue that will be derived from the Focus Debt Recovery Project. 'The minister has indicated that over the next six months, as he builds confidence, it will provide him the opportunity to consider how much of that he would like to include, both in the in-year but also out-of-year budgets.' He told the MPs that the Debt Recovery Project had a ring-fenced allocation in the previous financial year to focus on revenue recovery. 'Some of that we applied very specifically to debt recovery, spent just over R300 million in the last financial year, and we were able to employ just short of about 760 additional employees on a project basis, train them up, and get them to use our systems.' He said the cohort of debt collectors hired last year delivered just short of R25 billion that was included in the revenue outcomes of last year. SARS's final unaudited revenue outcome for 2024/25 stood at R1.86 trillion. Kieswetter said the first year of the debt recovery project has confirmed their view that revenue administration was integral to the fiscal integrity of South Africa and should not be taken for granted. Commenting on the modernisation of SARS, he said it was integral to the quality, the efficiency, and the effectiveness of their compliance programme. 'A significant amount of that is the work that SARS performs through auditors, investigators, and debt collectors to follow up not only service-related issues, but also non-compliance-related issues. Cumulatively, that work yields additional revenue, which, if not done, will not be collected.'
