An increasing number of South African taxpayers’ trust in the South African Revenue Service (Sars) has dropped, even though they said they believed that the quality of service is improving.
PwC’s had asked participants if their trust in Sars had increased in the last 12 months, and 42%, 45% in 2022, said it had, while 58%, 54% in 2022, said it had not.
This information is contained in PwC’s newly released Taxing Times Survey 2023, the sixth annual instalment of the survey was conducted between May and July 2023.
A total of 182 corporate taxpayers participated from 16 industries, including financial services, retail and consumer, agriculture, industrial manufacturing, energy, utilities, and mining.
The goal of the survey was to assess corporate taxpayers’ interactions with Sars, to identify the organisation’s strengths, and to highlight the areas that require improvement.
PwC SA Tax controversy and dispute resolution partner, Elle-Sarah Rossato says: “There has never been a more critical time for us to assess how organisations and their tax functions are operating, responding to and coping with Sars audits, debt collection processes, voluntary disclosure programme applications, and overall service delivery, given Sars’ drive to improve voluntary compliance and regain taxpayer trust.”
The survey revealed that a combined 53% of respondents said they “agree” and “strongly agree” on receiving quality service from the revenue service, a 14% improvement from last year.
According to the survey, the service delivery question was not specific to any processes undertaken by Sars but aimed at determining the general perception of taxpayers regarding Sars’ response time.
The report said additional comments received from participants on this segment included that Sars did not offer feedback after multiple attempts of communication.
"It is incredibly challenging to update public officer details on Sars’ efiling system. Sars respects timelines depending on the nature of the enquiry,“ were comments by some participants, said the report.
“Sars hardly ever adheres to any deadlines, and when you call for a follow-up, the agents are unaware of the proper deadlines or the requirements under the TAA (Tax Administration Act),” the report said.
"This is a critical issue that SARS must address, since rebuilding trust will eventually translate into restored public confidence, increased tax morality, and ultimately the payment of tax, which our country sorely needs to fulfil our fiscal budget.“
The report found that the lack of Sars’ staff knowledge has a massive impact on the trust taxpayers have in Sars.
"62% of participants indicated that they do not believe that Sars has improved in delivering quality outcomes and performance excellence over the past 12 months. This is 8% better than the prior year’s 70%, but still concerning results," the report said.
PwC SA Tax controversy and dispute resolution associate director Jadyne Devnarain says: “To cut down on the number of people who are obliged to file yearly income tax returns, Sars has expanded the implementation of automated assessments for personal income taxpayers.
"It is firmly addressing defaulting taxpayers, and we have observed several media reports in which Sars notifies non-compliant taxpayers that they will face administrative penalties for submitting tax returns late.”
The report said some respondents felt that the Sars e-filing system makes compliance easier but tax returns are becoming more complicated, which may result in penalties due to incorrect interpretation of questions.
"Administrative pressure is being applied to taxpayers in order for them to comply," it said.
The report said some respondents said they felt that a taxpayer was obliged to use online channels that only provide specific results. Cases are not treated individually.
"The amount of audits and requests for information makes it difficult to comply. The systems are always changing, sometimes for the better, but it is challenging to stay up to date," the report found.