Yes you can get a criminal record for failure to do your tax return
CAPE TOWN - Not filing your tax return is a crime and yes you can get a criminal record or failing to comply with the SA Revenue Service (Sars).
Just last month Sars released the names of 10 offenders who did not pay their tax returns. The move was largely seen as a way to "name and shame" individuals who did not comply, but according to Sars it was also a warning to ordinary citizens that this could happen to you.
Sars has always had the right to do this, but in the past has chosen to rather fine individuals, Darren Britz, a tax attorney at Tax Consulting South Africa told Fin24.
“We have a new type of taxpayer, guys who over the last 10 years who felt morally righteous about not paying their taxes,” Britz was quoted as saying.
“All Sars is saying let’s make a media campaign about this and let’s prove to taxpayers if they do not comply we will prosecute them criminally. Nothing has changed in terms of the (Tax Administration) Act, they have always been able to do this,” he explained.
“In other countries around the world, this is commonplace. If you do not pay your taxes you get criminally prosecuted.”
South Africans should be aware that any taxpayer can be called to submit to an audit. If Sars find that you have evaded Sars, you may be required to pay a fine and pay the tax that is owed.
Britz said that "depending on how bad your behavior is, your penalty essentially goes up”.
You could pay as much as 200 percent of the tax owed as a penalty or fine.
Sars terms the following under the non-compliance:
Not filing returns
Not paying taxes
Failing to complete your tax return correctly
Making false or erroneous statements
Not registering with Sars
Can Sars send you to jail? The answer is yes according to tax consultant Vincent Radebe. Sars has the option to send an offender to jail for a period of up to 2 years.
Radebe advised all South Africans to keep the keep the taxman aware of all updates in your financial life. Also, it is vital that you get a professional to check your tax calculations to minimise errors.
The 2018 tax filing season started on July 1 and you have until September 21 to file in tax returns manually or via post.
If you are a provisional taxpayer (a person who earns an income other than just your salary) and you are using Sars e-filing system you then you have until January 31.
Non-provisional taxpayers who use e-filing have until October 31 to file.
SO WHAT IS E-FILING?
e-filing is a free, online process for the submission of returns and declarations and other related services. This free service allows taxpayers, tax practitioners and businesses to register free of charge and submit returns and declarations, make payments and perform a number of other interactions with Sars in a secure online environment.
In April Sars made it very clear that it was moving towards seeking out South Africa's tax dodgers. Sars said it had set its sights on businesses withholding VAT and PAYE to recover a revenue shortfall, which it said was a result of deteriorating compliance with the country's tax laws.
Acting Sars commissioner Mark Kingon said the revenue service had experienced falling compliance in outstanding returns across all taxes.
Kingon said Sars was more concerned about the growing tendency of companies to withhold VAT and PAYE.
“The Sars outstanding returns campaign will be boosted this year to bring this matter under control,” Kingon said. “Sars is also collaborating with the Department of Justice to expedite the prosecution of tax offences.”
Sars said it had collected R700 million less in taxes in the 2017/18 financial year than its February revised target.
Sars said its preliminary figures showed that it only managed to collect R1.216 trillion during the period - less than the R1.217trln the National Treasury announced as a target during the February Budget speech.
However, the preliminary figures remained R72.4bn higher compared to the 2016/17 financial year.