10 tax trends SARS is clamping down on

Tax season 2019 officially opened on Monday July 1 for taxpayers who use the updated digital channels, namely eFiling and the SA Revenue Service MobiApp. This year, SARS is clamping down on non-compliant taxpayers – with the following 10 trends in the spotlight. 

Outstanding or late returns

Outstanding returns and late returns remain a concern and SARS says it will step up its enforcement of penalties in this regard.

Rental and Capital Gains Tax

“Many taxpayers still do not declare rental income from properties and we will improve our data matching in this regard by collaborating with the Deeds Office.

“This matching will also allow us to better enforce non-compliance in the declaration of Capital Gains Tax,” says SARS.

Commission
 
SARS will renew its focus on monitoring income and expenses from commission earners.

Trusts
 
SARS is concerned about the accuracy of declarations of distributions to and from trusts to the beneficial recipients.

Refunds

“We have also noticed tax preparers unethically promising taxpayers that they will secure a refund. They then look for opportunities to understate income or overstate expenses,” says SARS.

“This is a serious offence and could result in criminal charges as well as financial consequences for the taxpayer who remains accountable to SARS for their submissions.”

Fabricated expenses, IRP5s

SARS has noticed a trend of fictitious refunds being claimed for fabricated expenses and losses, as well as fictitious employers generating IRP5s for the sole purpose of claiming refunds.

Multiple returns
 
Fraudsters file multiple returns to create refund opportunities and syndicates re-use IRP5s across multiple individuals.

Risk modelling
 
SARS is working hard to improve the integrity of its profiling capability by using sophisticated risk modelling and expanding our data set.

Last year SARS prevented over R8.2bn fraudulent returns from being paid.

Prosecutions
 
SARS is currently working with both the SA Police Service (SAPS) as well as the National Prosecuting Authority (NPA) to criminally prosecute fraudsters.

SARS has already successfully convicted a number of taxpayers for non-compliance. It has even successfully convicted some of its own staff for colluding with taxpayers.

The super-rich
 
“We are instituting a renewed focus on high net worth (HNW) Individuals who often arrange their affairs in complex ways, often presenting higher compliance risks to SARS,” the revenue agency said.

Visit the SARS eFiling website here : www.sarsefiling.co.za

The SARS MobiApp is available on GooglePlay and the App Store

For July, the SARS Contact Centre will operate from 08:00 to 18:00 on weekdays, which amounts to an extra hour. You can contact the contact centre at 0800 00 7277. Taxpayers who want to file their income tax returns at a SARS branch may do so from August 1 until October 31, 2019.