SARS taking Action with Fines and Jail Time rolling out Fast in South Africa
South Africans not complying with the tax laws face serious prison time and mounting penalties.
A VAT fraud group was recently sentenced to a total of 205 years in prison by the Johannesburg High Court.
The sentences varied from 5 to 65 years, with fake VAT claims from SARS totaling more than R200 million.
SARS has convicted many people of crimes in recent years. This is because of lifestyle audits, fraudulent returns, and other serious tax offenses.
The Tax Administration Act, 28 of 2011 defines a “serious tax offence” as the following:
“Serious tax offence means a tax offence for which a person may be liable on conviction to imprisonment for a period exceeding two years without the option of a fine or to a fine exceeding the equivalent amount of a fine under the Adjustment of Fines Act, 1991 (Act 101 of 1991).”
A "tax offence" can be any violation of a tax law, including criminal offenses related to taxpayer non-compliance.
Taxpayers may be fined or jailed for breaking many rules. The rules are broad and cover a wide range of offenses.
This includes:
- Submission or issuance of false documentation / certification
- Obstruction of a SARS Official in carrying out their duties
- Failing to notify SARS of a change in registered details
- Failing to submit a tax return or retain sufficient records
Revenue collectors have had the option of criminal protection for a while. Recently, there have been more public statements about non-compliance than ever before.
“For context, the NPA took its seat at SARS’ round table back in 2003, by virtue of a Memorandum of Understanding (MOU). The agreement was updated in 2019. This led to a decrease in criminal cases related to tax evasion, which became a matter of public concern.
The MOU includes a commitment from the NPA to create a Specialist Tax Component. The MOU includes a commitment from the NPA to create a Specialist Tax Component. This team will focus on prosecuting serious and complex tax crimes. The SARS/NPA team has successfully handled these types of cases in recent years.
SARS and NPA are working together. More people and companies are being prosecuted successfully. They are facing penalties such as hefty fines and jail time.
SARS is increasing their funds through aggressive tactics. They are deducting money directly from salaries and contacting the Sheriff for assistance. Additionally, they are seizing funds from both business and personal accounts.
SARS Commissioner Edward Kieswetter promised to make it simple for taxpayers to do business with the organization and follow tax rules. For the non-compliant, it hopes to make life exceedingly difficult and costly.
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