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IOL News
2 days ago
- 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.
IOL News
21-05-2025
- Business
- IOL News
South Africa's budget 3. 0: A year of fiscal upheaval and strategic changes
As the months slip into May, the fiscal landscape continues to evolve, presenting both challenges and opportunities for the economy. Image: Ziphozonke Lushaba / Independent Newspapers In a financial milieu punctuated by unexpected shifts, South Africa's Finance Minister, Enoch Godongwana, unveiled his third National Budget for the fiscal year, titled Budget 3.0. The intricate journey to this point has been nothing short of extraordinary, marked by the postponement of the first budget and the withdrawal of the second due to legal wrangles. As the months slip into May, the fiscal landscape continues to evolve, presenting both challenges and opportunities for the economy. Joubert Botha, Head of the Tax and Legal practice at KPMG in Southern Africa, offered insights into the key elements of this revised budget, focusing on the implications for taxpayers and the broader economic framework. 'This year's budget has been marked by a comprehensive reevaluation of tax revenue projections," Botha said, reflecting on the substantial R61.9 billion downward revision of anticipated revenues. This significant adjustment signals the government's cautious approach amid ongoing economic uncertainty. One of the most discussed aspects of Budget 3.0 was the decision to forego an increase in Value Added Tax (VAT) that had stirred controversy in public discourse. Botha said that there would be no expansion of the zero-rated basket nor any hike in VAT rates. Instead, the budget placed emphasis on an inflationary increase in the fuel levy, a move set to stimulate various facets of fiscal support. Moreover, amid the fiscal recalibrations, the government has allocated R7.5 billion in funding to the South African Revenue Authority (SARS). This infusion of resources aims to enhance tax collection efforts, with projections of raising an additional R20 to R50 billion. The strategic focus on modernisation of SARS is set to bolster efficiency, ensuring the institution can adeptly tackle its collections mandate in an ever-evolving economic landscape. Notably, Budget 3.0 does not accommodate inflationary adjustments to personal income tax brackets or medical tax credits, a feature that many taxpayers will keenly feel, particularly as inflation continues to challenge household budgets. In contrast, adjustments to excise duties on alcohol and tobacco have been made, symbolising the government's stance on ensuring that certain sectors contribute fairly within the tax framework. As the budgetary processes unfolds, there is an anticipation of new tax measures to be proposed in the upcoming disbursements. Botha elucidated that further adjustments in the budget could herald innovative approaches to stimulate growth and address national priorities more effectively. "In summary, South Africa's Budget 3.0 encapsulates the narrative of a nation grappling with economic challenges while attempting to chart a strategic path forward. The absence of immediate VAT increases, alongside targeted funding for SARS and moderated adjustments in other tax areas, creates a complex but compelling fiscal tapestry as the country endeavours to stabilise and grow its economy amid numerous headwinds," Botha said. BUSINESS REPORT Visit:
IOL News
15-05-2025
- Business
- IOL News
Searching for VAT survivors after a bumpy ride for small businesses
he real victims, township businesses and family-run businesses, are left wondering if it is going to rain cats and dogs or bring clear blue skies for VAT season. Image: Ziphozonke Lushaba / Independent Newspapers South Africa's 'VAT desert storm' may have ended, at least for now, after witnessing political theatrics and policy paralysis, that attempted to bring snow to a desert while bidding to solve the dry revenue generation period. It almost displayed itself through a public gallery with all the makings of a political thriller—multiple plot twists, frantic coalition bartering, and a final 'U-turn of the century'—yet the real victims, township businesses and family-run businesses, are left wondering if it is going to rain cats and dogs or bring clear blue skies for VAT season. While the ANC, DA and EFF spar over 'fiscal sustainability' versus 'taxing the rich,' township spaza shops, clothing retailers and small cafés were caught in the crossfire. When President Cyril Ramaphosa attempted to patch his dripping VAT shack, suddenly, the Cape wind blowing from the DA's finance spokesperson Dr. Mark Burke, blasted the VAT proposal as an outdated ideology that has long sunk its head under Soviet beach sand. I trust that you will be able to connect the dots between ANC and Soviet beaches, if not, ask the zero pusillanimous 'Mbaks.' The EFF's Julius Malema, for his RED part, wanted nothing but 'kill the rich, spare the poor' demanding an increased tax on wealthy people who can afford to buy few buffalos without breaking a couch. Behind the not-so-closed doors, coalition talks teetered on collapse, with the DA taking its Government of National Unity (GNU) to court, only to later reconcile out of court. And just like that, every political butterfly came out of the cocoon proclaiming a colourful victory for taxpayers. Video Player is loading. 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Next Stay Close ✕ Yet, throughout this VAT expropriation spectacle, the real refugees were not the forty-nine (49) Afrikaaners, but rather South African small businesses, caught in the political pickpocketing without compensation. Some small companies spent weeks and vast sums of money updating their accounting software—only to end up starring in the ultimate 'behind-the-scenes' blooper reel of tax season. Even Uncle SARS—the tax collector small businesses love to vilify—finally grudgingly admitted that its VAT flip-flop has real-world fallout for vendors. The Commissioner conceded that SMMEs sank significant resources to cater for a rate hike that tried a moonwalk on the floor full of political potholes, as a result of an ambiguous parliamentary ping-pong VAT policy. Although SARS promises to make VAT ride less bumpy, for many township traders and family-run businesses, the bigger question remains: who will foot the bill for this tax-led whiplash? The naked truth is: the storm hasn't fully passed—there's still thunder rolling in the distance. The Finance Minister, Enoch Godongwana, is gearing up to re-table the 2025 National Budget on 21 May, for the third time this year and small businesses are bracing for yet another policy adventurous stint on planet Uranus. Budget 3.0 might promise fresh forecasts, potential spending cuts, and no mention of the ghost VAT hike, but the crystal ball warns SMMEs to hold tight, as a single day in the South African political dynasty is dangerously long. It has an inherent tendency to catch people flying by the seat of their pants, like Comrade Rasool's sudden departure from the now-famous refugee camp. While big corporates may survive a little fiscal drama, SMMEs are left asking if more belt-tightening, new levies, or actual relief is on the horizon. As the dust settles on South Africa's VAT Dakar Rally, the true survivors—township tuck shops, small businesses, and emerging agro-processors are those that have weathered the U-turns, re-priced their goods, and navigated SARS' labyrinthine communications with grit and resilience. The endurance of these businesses through political brinkmanship reveals a hard truth: each VAT debate risks becoming a road spike, not a revenue booster. As policymakers prepare for Budget 3.0, they must remember that SMMEs are not just line items, they're the backbone of job creation and community stability. True survivors will be those spared from policy ping-pong, supported instead by clear and consistent VAT frameworks that empower rather than penalise the very businesses we rely on to drive South Africa's economic revival. Bongani Ntombela. Image: Supplied. Bongani Ntombela, executive: programmes at 22 On Sloane. BUSINESS REPORT Visit:
IOL News
13-05-2025
- Business
- IOL News
SARS said to be planning ‘AmaBillions' blitz to collect outstanding tax, plug fiscal hole
SARS is reportedly planning a renewed clampdown on outstanding tax debt. Image: Ziphozonke Lushaba / Independent Newspapers The cancellation of Treasury's controversial Value Added Tax (VAT) increase has left a fiscal hole of around R75 billion in South Africa's medium-term budget, and this will reportedly see a renewed focus on tax dodgers. According to unnamed sources, the South African Revenue Service (SARS) is planning to recruit at least 500 new employees to pursue outstanding tax revenue. The initiative, which reportedly goes by the name of 'Project AmaBillions', will aim to recover at least R70 billion in tax revenue. It will target 'low hanging fruits' such as undisputed tax debt. It is believed that outstanding taxes owed to the revenue service currently amount to around R300 billion. Although SARS has not officially announced such a project, it does potentially tie in with the new Compliance Programme outside of the normal revenue collection stream, which was announced by Commissioner Edward Kieswetter during the preliminary Revenue Collection Announcement on April 1. He said SARS would target uncollected tax debt as well as people above the threshold who are currently not registered for tax. 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 ✕ Keitumetse Sesana of the SA Institute of Taxation said that although she was not aware of a 'special project' at SARS, Kieswetter's remarks made it clear that the revenue service would use its additional budget allocation of R7.5 billion to focus on debt cash collection and pursue over 5 million outstanding returns, as these would be 'easy wins' for closing the tax gap. 'For many years the SAIT has said that introducing new taxes is not the way to strengthen the state coffers,' Sesana added. 'We must go after the money in the system, owed to the fiscus but not reaching SARS. Non-compliant taxpayers must be made to pay their fair share. Only thereafter can South Africa consider introducing new taxes.' Sesana said it was likely that many new recruits would be brought into SARS, with a focus on manual phone calls as this method is believed to be the most effective way of nudging taxpayers to settle their debt. But what does this mean for South Africans who find themselves in the crosshairs? Jashwin Baijoo, Associate Director at Tax Consulting South Africa says: 'In practice, what we have seen, is SARS increasing its collection drive on outstanding tax debts, in an effort to eradicate tax non-compliance. That being said, SARS remains open to discussions on payment arrangements and tax debt write-offs where taxpayers face financial hardship.' Baijoo said SRS has written off R36.15 billion in the 2023/24 financial year. Get your news on the go, click here to join the IOL News WhatsApp channel IOL
