South Africa's tax revenue service, SARS, has adopted a more aggressive approach in pursuing tax collections due to a growing budget deficit. In the past year, SARS has become notably more assertive, employing tactics such as sending the Sheriff of the Courts or its Asset Forfeiture Team to collect taxes. This shift aligns with SARS's 2023 Strategic Objectives, emphasizing swift action against non-compliant taxpayers.
Non-compliant taxpayers may find their bank balances unexpectedly drained, as SARS can issue ITA88 notices to banks for third-party appointments without dispute. Banks are compelled to attach the taxpayer's funds to avoid bearing the debt liability. Similarly, garnishee orders against a taxpayer's salary can lead to partial deductions, whereas ITA88 can swiftly deplete savings.
SARS has grown impatient with non-compliant taxpayers who prioritize tax compliance lower than other aspects of their lives. During the 2023 filing season, SARS is vigilant about timely tax returns and settling tax debts. Failure to meet deadlines results in monthly administrative penalties, potentially accumulating into significant sums, especially for prolonged non-compliance.
SARS has enhanced its ability to identify non-compliance, including activities abroad, and is systematically addressing debts, imposing interest and penalties. Collection measures can range from third-party appointments to civil judgments, credit bureau blacklisting, and asset attachment and auction.
Receiving a final demand letter initiates the collection process, demanding full payment within ten business days, without further notice. Civil judgments against taxpayers are increasingly common, and SARS can act promptly after the deadline.
Taxpayers facing SARS actions are advised to engage with the service promptly to potentially reduce liabilities and avoid penalties and litigation. All correspondence from SARS should be addressed promptly to navigate these challenges effectively.
Acknowledgment: Businesstech 22 Sept 2023 #TaxCollection #SARSTax #TaxCompliance #TaxDebt #TaxPenalties #FinancialNews #SARSRules #SouthAfricaTax #Taxation2023
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