The South African Revenue Service (SARS) has noted with concern reports in the media suggesting that SARS has concluded a deal with Mr. Khoza and that "SARS will not proceed against Khoza for taxes".
SARS strenuously denies any suggestion in the media that an agreement was reached with Mr. Khoza. SARS confirms having engaged in discussions with Mr. Khoza's representatives with a view to conduct an investigation into Mr. Khoza's tax affairs on the basis of cooperation, total frankness and full disclosure. Contrary to what has been reported in the media, no agreement has yet been reached in this regard.
The secrecy provisions of the Income Tax Act bind SARS to treat the tax affairs of every taxpayer with utmost confidentiality. Notwithstanding grave provocation in some of the media reports, SARS will not disregard its obligation in terms of the Income Tax Act.
SARS reaffirms its "open door" policy and continues to encourage all taxpayers to make full and frank disclosure in their dealings with it. Where such an approach fails, SARS has other powers in terms of the revenue laws that it administers for purposes of gathering information to ensure that taxpayers pay that which is required in terms of the law. These include obtaining information from third parties about the taxpayer's affairs, as well as obtaining a search and seizure warrant from a judge of the High Court. In respect of defaulting taxpayers, SARS may levy penalties and additional taxes of up to 200% of the capital amount. In addition to this, SARS has certain powers to ensure payment of taxes due. This includes appointing third parties as an agent of SARS to collect taxes due. In the event of tax evasion, SARS will seriously consider criminal sanction against tax evaders, especially repeat offenders.
These options are utilized after due consideration has been given to all the circumstances of a taxpayer.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE