The taxman is set to swoop on businesses in a bid to get his hands on billions of rands owed to the state. The Deputy Commissioner for SARS, Mr Pravin Gordhan, stated that it would be "dooms day" for business withholding Value Added Tax and PAYE collected from clients and employees and described tax defaulters as "financial gangsters" stealing from the nation's coffers.
SARS' mandate is to promote compliance with the law and to ensure that citizens understand their tax obligations. Therefore, SARS intends to clamp down on the delinquent taxpayers, as failure to pay over VAT and employees' tax is viewed as a criminal offence and therefore defaulters could face serious legal and financial consequences.
SARS was prompted to meet with the Attorney General and senior prosecutors due to the increasing dishonesty of numerous employers and VAT vendors. These reckless tax defaulters have been avoiding their legal obligations by collecting money from their clients and employees in the form of VAT and PAYE, but have failed to pay it over to SARS. A recent audit showed that outstanding taxes were on the increase and had reached unacceptable proportions.
Therefore, tax defaulters could expect to be arrested and appear in court if they failed to pay outstanding amounts. SARS is also seriously considering liquidating or sequestrating the estates of those taxpayers that have consciously ignored their tax obligations.
SARS Operation's Manager, Mr Stan Shrosbree cautioned those withholding taxes that SARS is in the position to utilize the Tax legislation and Common law to assist in enforcing compliance nationally, as a number of attorney's have been appointed in 1998. Those affected are urged to contact their local offices immediately to bring their tax affairs up to date or face the consequences.
It is imperative that due cognisance is taken that SARS endeavours are not only to collect taxes, but the organisation is continuously fighting to reduce the tax gap to allow for a fair tax system for all. The Minister of Finance, Mr Trevor Manuel, in his budget address to Parliament on 17 February 1999, highlighted government's zero-tolerance attitude to tax evasion, whilst still promoting fairness and redistribution through the tax system.
SARS has therefore joined the Government in its endeavours to curb fraud and corruption by launching a Hotline Service to report various forms of tax fraud and corruption. True patriotism has to include a national effort to try and rid the public and private sectors from corruption, reconstruct South Africa's economy, meet the basic needs of the majority and reconcile society.
The external toll free number is available 24 hours a day seven days a week to all SA citizens to report tax evasion, fraud and corruption. Whilst SARS encourages all to portray good citizenship by complying voluntarily with the tax laws, it will not ignore those entities who practice tax immorality. Therefore we invite you to take up the fight against corruption and encourage and if need be, force each individual and corporate entity to meet their tax obligations. The SARS toll free Hotline number is
0800 00 2870
and all information will be treated as confidential.
Tax compliance is not optional, it is law and whilst SARS is attempting to cultivate a culture of voluntary compliance, the organisation intends to show no mercy to those who take it upon themselves to break the law.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE
PRETORIA