Pretoria, 12 March 2020 – The South African Revenue Service (SARS) wishes to thank those compliant employers who have carried out all their tax obligations as agents for SARS, in terms of our country’s tax legislation.

Employers are agents for SARS, as they deduct income tax that is due by an employee and pay the deducted amounts over to SARS. The amounts deducted or withheld by an employer must be paid to SARS on a monthly basis by completing the EMP201.

Employers are also required to submit an annual reconciliation declaration (EMP501) for the full year – from 1 March to 28/29 February.

However, many employers, just over 40 percent, deduct tax from their employees’ income through Pay-As-You-Earn (PAYE), but do not in turn pay SARS.

These non-compliant employers must note that it is the duty of SARS to communicate with employees about any potential tax shortfalls, which may be payable by them on assessment, because of the non-payment of PAYE by an employer. This can be avoided by paying the outstanding PAYE in full (including interest and penalties where applicable) to SARS, within 10 calendar days from receipt of a letter from SARS.

For employees to be able to receive a streamlined and seamless service during filing season, it is critically important that employers fulfil all their registration, filing and payment obligations.

If there is any non-compliance with any of these legal obligations, SARS will commence with criminal investigations, and lay criminal charges where necessary.

SARS’ role will be to provide clarity and certainty to all taxpayers about their tax obligations, and to make it easy to comply with these obligations.

Employers must remember that their compliance enables their employees’ compliance.

Furthermore, their on-time payment of the PAYE that they deduct from their employees constitutes a huge contribution to the revenue that SARS collects every year.

This revenue in turn allows government to provide the much-needed basic services and other public goods to the poorest of the poor.

All this is made possible by complying with their monthly and annual tax obligations.

Pretoria, Sunday 1 March 2020 – South African Revenue Service (SARS) Commissioner Edward Kieswetter has expressed his appreciation of the judgement of the Supreme Court of Appeal (SCA) to dismiss with costs an application for leave to appeal by businessman Mr Mark Roy Lifman.

The SCA ruled last week that Mr Lifman had no reasonable prospect of success in his attempt to stop SARS from seizing his assets in settlement of a tax debt amounting to R352-million, excluding interest.

In June 2019 Western Cape High Court Judge Elizabeth Baartman also dismissed Mr Lifman’s application for an order to halt SARS’ execution orders to seize Mr Lifman’s assets and auctioning them off to recover the tax debt.

She found that his objections to the assessments raised by SARS had been filed “belatedly and opportunistically”. Mr Lifman then turned to the SCA.

According to Commissioner Kieswetter, this latest protracted legal battle is further evidence that SARS is working hard to regain the capacity it lost over the past few years in dealing with taxpayers who are avoiding their tax obligations through an abuse of the legal system.

The latest SCA ruling comes immediately after a similar victory for SARS when the SCA ruled against Mr Gary van der Merwe in a 10-year battle over his tax debt.

“I want to appeal to all taxpayers and traders to discharge their legal obligations of paying their fair share of taxes. SARS is committed to helping you to comply with your obligations and entrenching a culture of voluntary tax and customs compliance.

“It is through such voluntary compliance and the associated revenue that SARS collects that our country will be able to provide basic services to the poorest of the poor, whether in the form of social grants, basic education, housing, medical care and other public goods.

“However, I want to warn those who seek to remain non-compliant through whatever means, that SARS will not rest until we recover what is due to the fiscus,” Mr Kieswetter said.

He added that there is a worrying trend developing among employers who deduct tax through from their employees through Pay-As-You-Earn (PAYE) but then fail to pay over the money to SARS.

“This development of PAYE non-compliance is a cause for concern and SARS is determined to take every action to stamp it out. The same applies to all other forms of non-compliance from other taxpayers and traders, whether they are in public institutions, private companies or individuals,” Mr Kieswetter stated.

To access this page in different languages click on the links below:

Cape Town, Friday 28 February 2020 – South African Revenue Service (SARS) Commissioner Edward Kieswetter has welcomed the court victory against Mr Gary Van der Merwe and various entities he controls after a 10-year court battle which ended up in the Constitutional Court.

On 5 February 2020, the Constitutional Court of South Africa dismissed Mr Van der Merwe’s application for leave to appeal an eviction order requiring him to vacate his home, which is held by Zonnekus Mansion (Pty) Ltd. The court held that the application bore no reasonable prospect of success.

The Constitutional Court order paved the way for the liquidators of Zonnekus to finally take control of the last remaining asset of Zonnekus. The Sheriff has evicted Mr Van Der Merwe from the property and placed it under the control of the liquidators. The liquidators can now finally sell the remaining property in order to recover the outstanding tax debt.

The SARS investigation originated from a Financial Intelligence Centre (FIC) report regarding  a suspicious transaction, involving the amount of approximately $15-million (R142-million).

Commissioner Kieswetter praised the SARS litigation team for their sterling work in this drawn-out matter.

“While the organization is rebuilding the capacity that was deliberately destroyed over the years, there are women and men who retain the wherewithal to effectively manage large and complex legal matters. This court victory shows that despite the aforesaid obstacles, the organization will continue to confront the recalcitrant taxpayers.

“In this respect, SARS will make it costly for those who are determined to be non-compliant and will oppose vexatious and frivolous litigation up to the highest court of the land,” Kieswetter said.

He assured compliant taxpayers who want to do the right thing that SARS would do everything in its power to assist them to comply with their tax and customs obligations.

However, SARS would take a tough stand against wilfully defaulting taxpayers and bring them to book, no matter how big the challenge. Other recent court victories involving fraudulent VAT refunds also attest to this resolve on the part of SARS to deal with tax criminals. In all, more than 80 individuals have received lengthy jail terms for defrauding SARS.

Commissioner Kieswetter reiterated his  earlier comments that- “tax crime, just like corruption, is not a victimless crime. It directly affects the poorest of the poor who are dependent on basic services including social security safety net for old age pensioners and child grants as well as provision of housing and education amongst others. 

SARS is therefore determined to enforce the tax and customs laws of the country without fear or favour in a responsible manner when all other legal avenues have been exhausted. This victory confirms SARS’ unwavering commitment to out root any non-compliant behaviour”.

• Case against SARS accomplice postponed for a further pre-trial.

Pretoria, 21 February 2020, Two Cape Town businesspersons were sentenced to 16 and 17 years respectively direct imprisonment in the Cape High Court earlier today. They were found guilty on 487 counts of VAT fraud and alternative charges such as racketeering, money laundering and corruption in terms of the Prevention of Organised Crime Act.

Mr Luis Filipe Duarte D’Almeida [Fernandes] from Melkbosstrand and Mr Nazmien Warner of Glenhaven, Bellville both pleaded guilty in terms of a plea bargain reached with the state following an in-depth investigation by the Criminal Investigation Unit of SARS in Cape Town.

Mr Fernandes pleaded guilty to 471 charges relating to racketeering, fraud as well as corruption and for corrupting a SARS official. He was sentenced to 158 years of imprisonment. With sentences running concurrently, he will spend 17 years in jail. 

Mr Warner pleaded guilty to 409 charges, including to racketeering, fraud and corruption in terms of the POCA Act. He was sentenced to 136 years imprisonment. With sentences running concurrently, he will serve an effective 16 years jail sentence. Mr Warner will pay SARS R900 000 as well as the proceeds of the sale of nine properties.
The charges emanated from a R115 million VAT fraud scheme ran by Mr Fernandes and Mr Warner between 2008 and 2015.

During this time, they claimed fraudulent Value-Added Tax Returns amounting to R115 million with the use of fictitious invoices from non-existent businesses, misrepresenting to SARS that they purchased goods in South Africa and exported this to countries in Africa. Mr Fernandes and Mr Warner furthermore forged export documents as well as supplier invoices and handed this to SARS upon request for supporting documents. SARS was prejudiced by R111 million.  

Fraud charges emanating from Mr Fernandes misrepresenting to his employees that the PAYE deducted from their remuneration was paid to SARS while the companies were never registered with SARS as employers, were also included in the indictment.

The accused admitted that they had enlisted the services of a SARS accountant to assist them with authorisation of refunds and get the refunds paid out fast. The case against the SARS employee has been postponed, although Messieurs Fernandes and Warner have agreed to testify against him.

According to the two accused they used the money to fund several failed business ventures, an internet gaming and social interaction website, low cost housing projects in Namibia and Cameroon, the importation and installation of revolving doors and a pre-paid fuel card.

They also used the money to maintain a high lifestyle, spending money on travel, motor vehicles, and luxuries.  Mr Warner also invested his share in properties.

Contrary to popular belief, tax crime is not victimless. By deliberately defrauding the tax system including claiming a refund one is not entitled to, one is stealing from the whole community and disadvantaging South Africans who do the right thing.

Today’s result demonstrates SARS’ commitment to detecting and prosecuting tax crimes and should serve as a warning to those who think they can flout the law and get away with it.

SARS Commissioner, Edward Kieswetter highlights that “Slowly the institutional rebuilding gains momentum, and whilst it is our strategic intent to make things easier for honest taxpayers, we are improving our capability to detect criminal and negligent taxpayer behavior to ensure they are successfully prosecuted”

If a taxpayer suspects or is aware of a SARS employee who is involved in tax fraud, they can report it confidentially at 0800 002 870.

Pretoria, 31 January 2020 – The South African Revenue Service (SARS) today releases trade statistics for December 2019 recording a trade surplus of R14.85 billion. These statistics include trade data with Botswana, Eswatini, Lesotho and Namibia (BELN). The year-to-date (01 January to 31 December 2019) trade surplus of R24.70 billion is an improvement from the R15.23 billion surplus for the comparable period in 2018. Exports increased by 4.1% year-on-year whilst imports for the same period showed an increase of 3.3%.

For the full media release click here.

Or visit the Trade Statistics webpage.