Finance Minister Malusi Gigaba says he is in talks with the South African Revenue Service (SARS) Commissioner Tom Moyane over concerns about tax refund delays that were forwarded to the Tax Ombudsman.
The Minister said this when he tabled the Medium Term Budget in the National Assembly on Wednesday.
“Government is aware of concerns raised by taxpayers regarding delays in refunds, and with regards to the capacity of SARS to deal with transfer pricing, increasing VAT fraud and aggressive tax structuring,” he said.
The Office of the Tax Ombud has also commented on these challenges and has made recommendations.
“I am engaging with the Commissioner of SARS on the recommendations made in August by the Tax Ombud and to take concrete and practical steps to help improve taxpayer confidence,” he said.
The Minister said, meanwhile, that the fairness and integrity of the tax system is critical for the deep social contract between government and people, and that it shapes the willingness of the people to pay their dues to the State.
He said that in that regard, it is important that government continually strengthen tax morality and deal with any underlying causes that may undermine it. This includes dealing with corruption, poor governance or those undermining or abusing the fairness of the tax system.
“While most of our taxpayers remain responsible, we are noting a slippage in compliance. SARS has enforcement powers, which are in the main punitive and this will be applied to taxpayers, who wilfully and cynically avoid paying their taxes.
“However, SARS also remains sensitive to taxpayers who are facing challenges,” Minister Gigaba said.
He said SARS was also aware of the major problem of illicit financial flows. SARS is now working closely with the Financial Intelligence Commission and the SA Reserve Bank to close loopholes.
However, the capacity of these institutions to fight crime must be enhanced, the Minister said.
“From an international perspective, the first exchanges of information under the global Common Reporting Standards took place at the end of September 2017. This information will give SARS insight into South Africans’ foreign financial accounts.
“Country-by-country reporting, which will give SARS insight into risk areas of multi-national enterprises, will begin at the end of this year (31 December 2017). The first exchanges will begin next year,” Minister Gigaba said. – SAnews.gov.za
