SARS goes after 440 taxpayers in South Africa who owe a median of R50 million in debt

The South African Income Service (SARS) is owed R190 billion by 1000’s of entities and particular person taxpayers.

This was revealed by finance minister Enoch Godongwana, who was responding to a Q&A in Parliament on Monday (16 Could). He mentioned that SARS is pursuing a number of methods to make sure that taxpayers perceive their tax obligations – and the place they fail to satisfy them, that the regulation is enforced.

He introduced knowledge displaying that 2,516 entities in South Africa owed R170 billion in tax debt to SARS, whereas 440 particular person taxpayers owed slightly below R22 billion.

Notably, simply 72 folks owe 68% of the overall as a consequence of SARS from particular person taxpayers, whereas round 500 entities owe 76% of all debt owed in that class.


People

Vary owed People Quantity owed % of whole Common
R10 million to R20 million 242 R3 417 727 560 15.6% R14 122 840
R20 million to R50 million 126 R3 693 222 590 16.8% R29 311 290
Greater than R50 million 72 R14 828 653 530 67.6% R205 953 520
Complete 440 R21 939 603 680 100.0% R49 862 740

Entities

Vary owed Entities Quantity owed % of whole Common
R10 million to R20 million 1 234 R17 041 074 610 10.0% R13 809 620
R20 million to R50 million 784 R24 257 828 450 14.1% R30 941 110
Greater than R50 million 498 R129 059 638 000 75.9% R259 155 900
Complete 2 516 R170 358 541 050 100.0% R67 710 070

The reported quantities embrace the capital debt, curiosity, penalties and extra tax, Godongwana mentioned.

The finance lead mentioned that tax debt arises from a variety of completely different situations which embrace the submission of returns with out cost, audit assessments, and so on.

“Relying on the origination of the debt, such debt can accumulate as a consequence of curiosity, penalties and extra taxes. Moreover, debt might be on account of a single evaluation leading to massive quantities of debt being added into the debt e book,” he mentioned.

He mentioned that SARS follows a prescribed debt assortment course of on all taxes overdue. Nevertheless not all cases of enforcement – e.g. deferral of cost preparations, third celebration appointments, and so on. – readily result in all debt being collected timeously, such that some debt stays within the books while assortment steps are ongoing.

SARS authorized assortment steps will embrace issuing a closing demand and appointment of third events, civil judgments, private legal responsibility, writ of execution, and so on. which can give option to the attachment of property.

“SARS additionally considers prison proceedings towards taxpayers on the idea of the tax debt owed. Every debt case would nonetheless be handled by itself deserves nonetheless SARS all the time search to make sure that all due debt is collected on time so far as virtually doable and that the enforcement actions are utilized constantly, bearing in mind the information of every case,” the minister mentioned.

SARS lately printed its strategic plan for the following three years, which incorporates its intentions to safe income sources.

Over the following three years, it needs to implement a ‘income restoration programme’ that’s aimed toward elevating general income by 5% to 10% from what it calls ‘compliance’ actions.

This consists of:

  • Curbing exemptions, thereby lowering the tax system’s complexity whereas boosting income by broadening the tax base.
  • Creating a tax and customs system primarily based on voluntary compliance.
  • Adopting tax broadening methods to enhance the tax collections from a wider base of taxpayers.
  • Growing audit capability, which is an efficient option to encourage compliance.
  • Encouraging shoppers to return ahead on a voluntary foundation to control their tax affairs and keep away from the imposition of understatement penalties and administrative penalties.

Learn: SARS has a plan to extend tax assortment in South Africa

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