The South African Revenue Service (Sars) believes that the “requisite confidence” in its systems will be restored following the conclusion of an investigation by the Tax Ombudsman.
On Monday, the deputy Minister of Finance, Mcebisi Jonas, granted permission to the Office of the Tax Ombud to investigate the revenue authority’s systems, following political pressure to look into delays relating to tax refunds – including VAT, employee tax incentives and diesel refunds.
Democratic Alliance (DA) Shadow Minister for Finance, Alf Lees, highlighted in parliament recently that the country’s official opposition party was receiving an “exceptionally high” number of calls from businesses who had not received their tax refunds.
“This causes considerable financial distress to businesses, especially small businesses,” said Lees.
He has welcomed the decision by Jonas, urging the Tax Ombudsman to “swiftly and thoroughly” investigate both systemic and process failures in order to deal with what Lees claims is clearly a “major concern for businesses and ultimately for economic growth”.
The DA suggests that crisis has developed in Sars, especially under the leadership of commissioner Tom Moyane. “There is a climate of low morale, division and weak management which is now hindering the collection of revenue,” said Lees.
In response, a Sars spokesperson said that the Office of the Tax Ombud and the Ministry of Finance could be assured of its full cooperation during the investigation.
According to the spokesperson, many of the current taxpayer complaints pertain to VAT refunds. “It must highlighted that Sars has an obligation to ensure both service and compliance which includes complying with the legislation and ensuring that all incorrect activities are managed correctly - which could include fraud,” he said.
He added that, due to an increase in fraud, Sars had been forced to react by tightening up its risk rules. “Despite such actions, Sars has only referred about 11% of the cases for detailed audit.”
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