In a recent newsletter we reported that many of our clients had experienced problems with SARS delaying the payment to our clients of both VAT and income tax refunds.
In his recent budget speech finance minister Gordhan announced that some of the R30,4 billion shortfall in tax revenue in the 2016/2017 tax year was due to SARS not fulfilling its duties. Speculation has been that SARS has withheld VAT refunds in order to boost its tax revenue collection ie limit the negative impact of this R30.4 billion shortfall.
Apparently, and in spite of Commissioner Moyane’s very vocal objections to the degree of accountability he has to the Minister of Finance, legal provisions explicitly point out that the Minister of Finance is empowered to make regulations in relation to information from the Commissioner he or she deems necessary in order to ensure transparency and reporting on tax collection.
Thus the good news: this week the Finance Minister’s office announced that it planned to prescribe regulations regarding the duties of people employed by SARS to administer the tax acts in order to ensure better tax collection. When implemented this should have the effect of limiting the ability of SARS to withhold tax refunds.
