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IOL News
11-07-2025
- Business
- IOL News
SARS aims for R100bn in tax collection this season
Sars's debt book is currently comprised of all tax types, including personal and corporate income tax, as well as value-added tax and unpaid payroll taxes. Image: Ziphozonke Lushaba/Independent Newspapers HAVING had great success with its specialised tax compliance programmes over the last few years, the SA Revenue Service (Sars) has now called in the cavalry this tax return filing season, through Project AmaBillions, to bolster its tax debt collection capabilities. As the name may indicate, the successful collection of billions in outstanding tax revenue, be it disputed or undisputed tax debts, requires the harmonising of manpower and artificial intelligence, both key items on Sars's agenda. The revenue authority's recently published monthly collection data showed R95 billion in outstanding taxes being collected for the 12-month period ending March 2025. Although an impressive and unprecedented collection windfall, a staggering R422.6bn in undisputed tax debts, remains outstanding as at the end of May 2025. In its pursuit of making non-compliance hard and costly, and chasing South Africa's largest ever tax revenue collection pay-day, Sars has taken the idiom of 'you have to spend money to make money' to a whole other level. Through an additional expenditure allocation of R7.5bn over the medium-term, Sars has onboarded around 1 700 new resources, from matriculants to seasoned tax and compliance experts. 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 Sounds a lot like Survivor, or better yet, the Hunger Games — only the strong will survive… but no, the intention behind this strategic move is to spend a few billion rand, to collect Amabillions; R20 to R50 billion more, per year, to be precise. With a current debt book totalling more than R530bn, Sars's assertive collection efforts do serve the best interests of the South African economy, even if the taxpayers finding themselves with a civil judgment against their names do not think so. Sars's debt book is currently comprised of all tax types, including personal and corporate income tax, as well as value-added tax and unpaid payroll taxes. This includes taxpayers who wilfully avoid or evade the payment of their taxes, whose amounts are well within their means to settle, and who should not be surprised when Sars empties their bank accounts. But what happens to those individuals, or small businesses, who, due to unforeseen circumstances, simply cannot afford to settle their tax debt to Sars? Whether it be more time needed (monthly instalments), or interest and penalties having snowballed the debt well beyond affordability and some financial reprieve is needed, there are legal tax debt relief mechanisms available. Where a taxpayer is truly experiencing financial hardship, they may qualify for a compromise of tax debt. This is where the taxpayer, who cannot afford to settle the entire amount, approaches Sars and asks for a write-off of interest and penalties which have been attributed to the capital amount owed. The taxpayer then offers to settle (in part or in full) the capital amount owed to Sars, either by lump sum or instalment payments. This proposal, when accepted by Sars, must be reduced to writing. The biggest attraction to a compromise is the write-off of interest and penalties, which is a life jacket afforded to taxpayers who are genuinely experiencing financial hardship but wish to settle their debt and remain compliant moving forward. It is also important to note that a compromise can be applied to any form of tax debt and across all tax types, be it income tax, VAT or PAYE, and regardless of whether it is for an individual, trust or company. There is relief available to all taxpayers who qualify for the compromise of tax debt. Taxpayers who do not satisfy the requirements for a compromise but cannot afford to settle a tax debt in a lump sum payment still have the option to apply and enter into a payment arrangement with Sars, which is known as a deferral of payment. This is where the taxpayer applies to Sars, subject to certain conditions, for a payment agreement in which the taxpayer can settle the outstanding amount over monthly instalment payments over time. This is an attractive option to many taxpayers, as it lessens the burden and reduces a large number that is expected to be settled immediately, to one that is manageable and paid in monthly instalments, which are convenient to the taxpayer and Sars. To protect yourself from Sars, ensuring compliance remains the best strategy. Where you find yourself on the wrong side of Sars, there is a first-mover advantage in seeking the appropriate tax advisory, ensuring the necessary steps are taken to protect both yourself and your bank balance from paying the price for what could be the smallest of mistakes. However, where things do go wrong, Sars must be engaged legally on all fronts. As a rule of thumb, all correspondence received from Sars should be immediately addressed by a qualified tax specialist or tax attorney, which will serve to safeguard taxpayers against Sars implementing collection measures. It is recommended that a request for compromise or payment arrangement be made in a proactive manner, even before a Letter of Final Demand is received, rather than waiting for Sars to come knocking at your door. Through these carefully negotiated solutions, there is the possibility of a fresh start — a fair and balanced outcome that recognises the taxpayer's situation and provides the breathing room necessary to regain financial stability, whilst ensuring tax compliance this 2025 tax return filing season. * Jashwin Baijoo is an associate director and head of strategic engagement and compliance at Tax Consulting SA. ** The views expressed here do not reflect those of the Sunday Independent, IOL, or Independent Media. Get the real story on the go: Follow the Sunday Independent on WhatsApp.
IOL News
05-06-2025
- Business
- IOL News
Sars launches Project AmaBillions: expect a surge in VAT audits
Discover how Sars' new initiative, Project AmaBillions, is set to increase VAT audits significantly, impacting businesses across South Africa. Learn what steps you can take to ensure compliance and avoid penalties Image: Ziphozonke Lushaba / Independent Newspapers According to recent media reports, Sars has launched a new initiative — Project AmaBillions — as part of its broader strategy to boost revenue collection by an additional R70 billion over the next three years. To support this objective, Sars has reportedly already recruited 500 new staff members, with an additional 1,000 to 1,500 appointments anticipated. While this expanded capacity will enhance Sars' ability to collect, across multiple tax types, Value-Added Tax (VAT) remains an easy target, with a notable increase in VAT-related audits, verifications, and additional assessments already being observed. In this evolving compliance landscape, businesses, particularly those operating in complex or high-risk sectors, are encouraged to revisit their VAT positions and ensure that both legal interpretation and supporting documentation are up to standard. VAT as an Easy Win for Sars The government's recent proposal to raise the VAT rate met significant public resistance and was ultimately shelved. However, the fiscal demands that prompted the proposal remain unchanged. In the absence of a rate increase, an easy target is the enhanced enforcement of existing VAT obligations as a more immediate mechanism to protect the tax base. Given the transactional nature and extensive reach of VAT, it remains one of the most active areas of Sars enforcement, and from a tax collection standpoint, is second only to Personal Income Tax, per Sars' Revenue Announcement for the 2024/25 Financial Year: Except from the 2024/25 Revenue Announcement presentation: Recent trends confirm an increase in audit activity, particularly where VAT positions rely on complex interpretation or are not fully substantiated by documentation. Certain areas are particularly at risk: Input tax deductions , where Sars may challenge the deductibility based on the nature of the underlying expense, its link to taxable supplies, or the quality of supporting invoices; Zero-rated supplies , especially exports, where documentary proof and timing requirements are closely examined; and Apportionment calculations , in cases where businesses make both taxable and exempt supplies, and Sars queries the method used to determine the deductible portion of input VAT. In addition to heightened audit activity, input tax deductions have become increasingly the subject of legal proceedings, with courts being asked to assess whether deductions meet the requirements of the VAT Act. Often, the success or failure of a claim rests both on the commercial reality of the transaction and on whether the taxpayer can demonstrate compliance with the relevant documentary and legal criteria. Discharging the burden of proof As a self-assessment system, VAT places the burden of proof squarely on the taxpayer. Sars does not need to prove a taxpayer is incorrect; rather, it is the taxpayer who must prove that the tax position adopted is correct. Documentary shortcomings that can result in adverse audit findings may include: Incomplete or non-compliant tax invoices; Missing or outdated export documentation; Contracts or agreements that do not support the VAT treatment applied; and A lack of internal policies governing apportionment or exempt supply treatment. Even businesses with reputable systems or historic Sars engagements should not assume automatic compliance. Audit readiness requires continuous alignment with Sars' current expectations and the evolving interpretation of the VAT Act. High-risk for high reward: which businesses are most scrutinised? While all VAT-registered vendors are subject to review, recent enforcement trends suggest that the following types of businesses may be more susceptible to VAT scrutiny, especially in light of the looming 'Project AmaBillions': Exporters of goods and services , particularly where zero-rating is applied; Foreign suppliers of electronic or remote services to South African recipients; Property developers and investors , due to the complexity of VAT on construction, disposals, and mixed-use properties; and Enterprises with substantial input tax deductions or recurring VAT refunds . In these cases, a proactive review of VAT compliance and risk report may assist in identifying and addressing potential exposure, before they are raised by Sars. A Coordinated Tax Debt Collection Strategy 'Project AmaBillions' is more than a revenue slogan — it reflects a deliberate shift by Sars toward coordinated and data-driven enforcement, leading to increased tax revenue collections. This includes the use of Artificial Intelligence tools, targeted audit selection based on risk modelling, and specialised teams focused on high-yield areas such as VAT, High-Net-Worth taxpayers, and Cryptocurrency. With the recruitment of up to 1,500 additional staff, Sars is positioned to expand its enforcement reach significantly over the coming months. Proactive compliance is key While increased audit activity may place pressure on internal finance and tax teams, early intervention and strategic review can help businesses avoid prolonged disputes or unintended liabilities. A targeted VAT review can assist in confirming that: Zero-rated supplies are supported by adequate and compliant documentation; Input tax deductions meet all legal and documentary requirements; Invoicing and contractual frameworks comply with SARS standards; and Internal VAT procedures, including apportionment and record-keeping, are robus t. Early action prevents future exposure Where there is uncertainty around VAT treatment, and businesses find themselves in a potentially precarious position of now facing Sars scrutiny, the best practice is to seek the assistance of a tax professional, ensuring the best compliance strategy is followed. Early assessment can help prevent future challenges, reduce the risk of penalties and interest, and ensure Sars readiness in an increasingly vigilant digitized environment.
IOL News
03-06-2025
- Business
- IOL News
SARS aims for R20 billion through strategic revenue enhancement initiatives
SARS has taken valuable lessons from the 2024/25 debt-collection drive. Image: Ziphozonke Lushaba / Independent Newspapers The South African Revenue Service (SARS) is determined to tackle the pressing financial challenges facing the nation, affirming its commitment to serve with integrity and efficiency. As a critical entity in collecting revenues that fund essential public services, SARS has announced an ambitious goal of raising a minimum of R20 billion in revenue through strategic enhancements and technical innovations. With valuable lessons learned from the 2024/25 debt-collection drive still fresh, SARS is refining its operations to ensure that its revised revenue estimates are met this year. Paramount among these efforts is the use of advanced data analytics and artificial intelligence, tools that are revolutionising how the agency detects tax compliance risks and combats tax evasion. By integrating expansive third-party data sources such as banking and payroll information, SARS is automating tax assessments and more accurately identifying underreported income. This sophisticated approach aims not only to strengthen compliance rates but also to close the persistent tax gap that has long plagued the South African economy. 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 Furthermore, SARS is intensifying its fight against the illicit economy, particularly in sectors that generate significant revenue, such as tobacco, alcohol, and fuel. Through enhanced enforcement measures targeting smuggling, counterfeit goods, and black-market transactions, SARS seeks to recover substantial revenue losses while simultaneously deterring future non-compliance in the informal economy. Another critical initiative involves broadening the tax base. SARS is systematically identifying and registering individuals and businesses that have previously operated outside the formal tax system. By focusing on hard-to-tax sectors—specifically small enterprises and self-employed individuals—SARS is actively mobilising increased revenue and lessening reliance on a narrow tax base. SARS Commissioner Edward Kieswetter Image: Timothy Bernard / Independent Newspapers
IOL News
31-05-2025
- Business
- IOL News
Point of view: understanding the impact of eFiling fraud on South African taxpayers
Discover the troubling findings of the Tax Ombud's eFiling Profile Hijacking survey, revealing the extent of fraud affecting South African taxpayers and the urgent need for improved security measures. Image: Ziphozonke Lushaba / Independent Newspapers The latest findings from the Tax Ombud's eFiling Profile Hijacking survey paint a stark picture of the vulnerabilities within South Africa's tax system. The Tax Ombud, Yanga Mputa, presented these findings this week. The numbers alone tell a worrying story: nearly half of the respondents were registered tax practitioners, while a significant portion, 32.7%, were individual taxpayers. The hijacking of tax profiles is not a minor inconvenience; it is a direct assault on the integrity of Sars, the security of taxpayers, and the trust that businesses and individuals place in the tax system. Alarmingly, a significant portion of those surveyed had firsthand experience with eFiling hijacking, with 41% reporting that they encountered this form of fraud. Meanwhile, 38% of tax practitioners had clients who fell victim to it, and 21% had witnessed it happening to someone else. These figures highlight that this is not a niche issue affecting a handful of unlucky taxpayers—it is widespread and systemic. The types of tax affected provide further insight into the nature of these attacks. Personal Income Tax was the primary target, making up 65% of reported cases, followed by VAT at 20% and Company Income Tax at 15%. This underscores the fact that individuals, rather than corporations, bear the brunt of eFiling fraud. The financial implications are severe: fraud amounts ranged from sums below R10 000 to staggering figures exceeding R1 million. For many victims, this is not just a bureaucratic headache, it is financial devastation. What is even more concerning is the response-or lack thereof—from authorities. More than half (52%) of the respondents did not report the matter to the police, and an additional 23% did not even know if they should. This raises critical questions about law enforcement's ability to assist victims and deter perpetrators. Even among those who did report their cases, the question remains: What action, if any, was taken? The survey further reveals the enabling factors behind these fraudulent activities: internal fraud and insider involvement, a lack of cybersecurity safeguards, system vulnerabilities, and ineffective response mechanisms from Sars itself. The fraudulent modification of banking details adds another layer to the crisis, demonstrating how easily financial data can be exploited. There is an urgent need for improved security measures and greater education and awareness of the risks. Sars, the institution tasked with protecting taxpayers, does not emerge unscathed from this report. While 71% of respondents attempted to report their cases to Sars, only 11% found the response to be effective. A staggering 89% of those affected indicated that Sars' intervention did little to resolve the issue. The failures range from a lack of communication and responsiveness to inefficiency and delays. Improved security measures, more thorough investigations, and a strengthened customer support framework should be the starting point. The most damning statistic of all is the assessment of Sars' communication and interaction following the discovery of fraud: 82% of respondents found it inadequate and ineffective. The victims of eFiling hijacking deserve better, swift action, transparency, and assurance that their financial records are secure. The findings of the survey make it clear: eFiling hijacking is a pressing issue that demands immediate attention. Addressing this challenge effectively is crucial to maintaining confidence in the tax system and ensuring taxpayers feel secure. Sars has an opportunity to strengthen its processes, enhance its responsiveness, and implement robust measures that protect individuals and businesses alike. By taking decisive action, it can reaffirm public trust and demonstrate its commitment to safeguarding taxpayer information. A proactive and transparent approach will go a long way in preventing further exploitation and ensuring the integrity of the system. * Maleke is the editor of Personal Finance PERSONAL FINANCE
IOL News
22-05-2025
- Business
- IOL News
Trial resumes: High-profile tax fraud case tied to SAPS corruption scandal
SARS officials take the stand in the R19 million tax fraud trial linked to the SAPS 'blue lights' case. Image: Ziphozonke Lushaba / Independent Newspapers The Palm Ridge Magistrates' Court has adjourned the high-profile tax fraud trial involving Vimpie Phineas Manthata, his company Instrumentation for Traffic Law Enforcement, and a co-accused, Judy Rose, to Thursday. The case, which is closely watched due to its links to the infamous 'blue lights' SAPS corruption scandal, resumed this week with explosive testimony from officials of the South African Revenue Service (SARS). Manthata and Rose are facing charges of fraud and contravention of the Tax Administration Act, stemming from alleged irregularities during the 2018/2019 tax assessment period involving an estimated R19 million. Rose, employed as a bookkeeper at the company, is accused of being a direct accomplice. According to the Investigating Directorate's spokesperson, Henry Mamothame, the state opened its case on Monday with testimony from a senior SARS official. 'The second witness from SARS took the stand prior to the adjournment and is expected back in court to be cross-examined by the defence attorney,' said Mamothame. 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 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. Next Stay Close ✕ In addition to the tax-related charges, the accused are also implicated in a separate corruption case involving an alleged irregular R191 million contracts awarded by the South African Police Service. Mamothame confirmed that both Manthata and Rose are currently out on R10 000 bail each. 'The court warned them to be back when the trial resumes,' he added. The trial continues Thursday, where further cross-examinations and state witnesses are expected to shed more light on both the financial misconduct and its connection to the broader SAPS corruption saga. IOL News Get your news on the go, click here to join the IOL News WhatsApp channel.
