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Tax Practitioner Connect Issue 28 (December 2021)

All eFiling forms were successfully migrated to HTML5

We are pleased to inform you that significant progress has been made with the migration of the Adobe Flash forms to the new HTLM5 platform. All forms have been successfully migrated.

This means you are no longer required to use the software which was introduced as an interim solution whilst SARS completed the migration. Thus, no further download and usage of the SARS Browser is needed.

Please note that existing browsers such as Chrome, Edge and Safari will continue to work for all forms already migrated, including the major and high volume ones being Income Tax (PIT, Provisional Tax, CIT & Trusts), Value Added Tax, Pay as you Earn and Excise forms.

The final batch of forms migrated to HTML5 include the RAV01 Registration form, the Amendments and Verification form, the TDC01 Transfer Duty form, IT3-01 Financial Certificate Information, IT3-02 Financial Declaration, the TCR01 Tax compliance Status Request, DTR01 Dividends Tax Transactions Information and the WTI Withholding Tax on Interest form.

RCB engagements

SARS has met with all Recognised Controlling Bodies (RCBs) in the last two months to clarify their obligations in terms of Chapter 18 of the Tax Administration Act and the implementation thereof. 

These sessions are important to ensure that both SARS and the RCBs – as co-regulators of tax practitioners – have the same understanding in regulating the tax practitioners’ segment. The robust engagements were focused on both administrative and tax compliance by RCBs and tax practitioners, and the role of SARS in enabling the RCBs to fulfil their obligation.

The engagements have identified challenges affecting RCBs and tax practitioners to enable them to provide professional service to taxpayers. 

Dispute process and dispute resolution for PAYE penalties

Penalties for late filing of Pay-As-You-Earn (PAYE) returns by employers was introduced this year. SARS is in the process of enhancing our dispute resolution process to allow for this penalty to be disputed separately from a PAYE late payment penalty.

If a taxpayer receives another PAYE penalty for the same tax period, she/he will not be able to complete a Request for Remission or lodge an objection against the added penalty on eFiling, if the prior Request for Remission or Dispute has been finalised.

The enhancements to the dispute resolution process should be ready soon, but if a taxpayer wishes to do a Request for Remission or Dispute in relation to this penalty, SARS will, as an interim measure, accept a written Request for Remission or ADR1/ ADR2 form in relation to the added PAYE penalty, depending on where in the process the matter is.  

To use the interim process to submit a Request for Remission, Notice of Objection or Notice of Appeal, please follow these steps:

Step 1: Check on eFiling that the penalty amount for which you wish to request remission, object or appeal is blocked and cannot be submitted. If eFiling blocks you, then proceed to Step 2.

Step 2: Type or write a Request for Remission and include the reason for your request as well as the PAYE reconciliation period or transaction numbers of the penalties incurred, or the EMP201 periods. Before you do this, please visit the Request for Remission of Administrative Non-compliance penalty webpage to understand the legislative requirements.

Step 3: If you already submitted a Request for Remission, but you remain aggrieved by the outcome then use the ADR1 form in the case of an objection. If you already objected and the objection was dismissed, and you wish to appeal, then use the ADR2 form. The ADR1 and ADR2 forms can be downloaded here https://www.sars.gov.za/find-a-form/.

Step 4: Submit your Request for Remission, ADR1 or ADR2 to [email protected]. You will receive a case number, which must be used in any future correspondence with SARS relating to this matter.

Step 5: Once SARS has considered the request for remission, objection or appeal, SARS will notify you by way of a letter addressed to you via your preferred channel of communication.

Read more about the dispute resolution process on our website Dispute Resolution Process – South African Revenue Service (sars.gov.za)

Click here to read the guide on How to submit a Dispute via eFiling.

Oakbay director sentenced to 10 years direct imprisonment

The South African Revenue Service Commissioner, Mr Edward Kieswetter, welcomed a 10-year prison sentence imposed on the Director of Oakbay Trading, Mr DP Naik. Mr Naik was convicted for fraud and for contravening the Customs and Excise Act after he falsified export documents and diverted cigarettes back into the South African market without paying the excise and duties for import and export.

Mr Naik claimed that the company had exported cigarettes to Zambia. These exports were investigated and proved to be false exports. This crime was committed to evade duties and excise payable on the cigarettes.

He was convicted on five counts of fraud and for contravening section 80 (1) of the Customs and Excise Act. According to evidence presented in the Johannesburg Regional Court, the total prejudice to SARS is R18-million.

Mr Kieswetter praised the investigating team and the co-operation of the National Prosecuting Authority (NPA) for securing a conviction and sentencing.

“This conviction and sentencing should send a clear signal that SARS has a zero tolerance for such criminal behaviour and will use all avenues at its disposal to pursue these criminals,” Mr Kieswetter said.

Tswaing Municipality assets attached over tax bills

The assets of the Tswaing local municipality in the North West province were attached by the sheriff as a result of a tax debt of R30-million owed to SARS.  The local municipality, which covers the towns of Delareyville, Sannieshof and Ottosdal, submitted returns to SARS, but did not make any payments for Pay-As-You-Earn (PAYE), the Skills Development Levy (SDL) and the Unemployment Insurance Fund (UIF), which resulted in the debt.

Private companies, government institutions as well as other employers are required by law to deduct these taxes from employees and then pay these monies over to SARS.

SARS Commissioner Edward Kieswetter expressed his deep concern at such wilful non-compliance. “SARS is left with no alternative but to invoke the law to deal with such non-compliant taxpayers. SARS is fully committed to uprooting the culture that has taken hold wherein a taxpayer files and submits returns yet withholds the payment. This type of behaviour deprives the fiscus of what is due and is unfair to other compliant taxpayers,” he said.

He concluded that “SARS has turned its attention to this practice, and all those who indulge in this behaviour can be assured that we will not look away, regardless of the taxpayer involved. While SARS remains open to engagement over payment arrangements, it will act without fear, favour or prejudice against recalcitrant taxpayers. This is a warning to all who have chosen to embark on this path of non-compliance.”

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