Sars, Treasury ’not doing enough’ to assist taxpayers
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THE South African Revenue Service (Sars) and the National Treasury have not done enough to assist taxpayers with tax relief during the pandemic and lockdown to relieve liquidity and promote business continuity.
This is according to half the respondents of the fourth edition of PwC’s Annual Taxing Times 2021 Survey last week.
Some 25 percent said they reduced or discontinued PAYE payments and 20 percent discontinued or reduced their provisional tax payments.
When asked whether Sars was equipped to handle their company’s queries or service-related issues during lockdown, only 4 percent felt that Sars was “always” equipped.
The survey, conducted between May and June this year, was created to benchmark corporate taxpayers’ experiences with Sars. A total of 159 respondents completed the survey. Taxpayers from across 21 industries participated, with the financial services sector being the highest contributor.
PwC Partner and Africa Lead for Tax Controversy and Dispute Resolution Elle-Sarah Rossato said the survey tested perceptions regarding interactions across a multitude of channels with Sars in challenging times.
“In some areas, the results were positive, such as a significant improvement in the turnaround time of Voluntary Disclosure Programmes (VDPS and VAT refund payouts. In other areas, however, such as finalising audits, service delivery, delays in settlement proposals as well as overall communication with taxpayers, Sars did not fare well.”
The tax landscape has undergone significant change with several leadership, structural and policy changes. In addition, the Covid-19 pandemic has impacted government coffers, disrupted businesses, and placed tremendous financial strain on individuals.
In response, the government introduced several economic measures, including tax relief, in order to protect businesses and alleviate financial pressure on vulnerable employees.
On the audit process, 54 percent felt that they were “extremely likely” to be selected for an audit/verification following submission of their Corporate Income Tax returns, compared to 48 percent in last year. This year’s results also show that only 32 percent of respondents have had their income tax verifications finalised in one to three months, which is a sharp decline from 49 percent last year and 43 percent in the previous year.
Rossato said that although the turnaround time for finalising VDP applications remained slow, they hoped to see a continuation ofit.
Regarding delivery, 57 percent, compared to 47 percent last year, believed that the Sars Service Charter mades “no difference” to the quality.
Most respondents, 92 percent, believed that it was “somewhat likely” or “extremely likely” that they would be audited by Sars during the tax year, an increase from 89 percent last year.
It was notable that 67 percent of respondents said public trust had not been restored in Sars. Sixteen 16 percent believed that it was.
“Trust has never been more important, nor more difficult than now. Organisations increasingly need to earn trust across a wide range of topics that are important to their stakeholders. Success depends on fundamental shifts in the way executives think, organisational culture, systems, and ambition,” said Rossato.
Regarding the revitalisation of the high wealth individual taxpayers’ unit, participants were asked if they believed the revival and renewed focus on high-income earning taxpayers would assist in closing the tax gap. Less than half, 47 percent, believed it would, 36 percent said it would not and the remaining 16 percent said they “somewhat” believed that.