SARS has announced that it will intensify criminal proceedings against tax offenders from October.

In a statement released, the revenue collector warned South African taxpayers to “pay your taxes or pay the price”, after it had seen a large increase in taxpayers not submitting their returns within stipulated timeframes.

“We have noticed an increase in taxpayers not submitting their tax returns by the stipulated deadlines‚ and not settling their outstanding debt‚” SARS said.

“This is not limited to the current tax year but includes substantial non-compliance across previous tax years. It is for this reason that from October 2017 SARS will now intensify criminal proceedings against tax offenders.”

“Should any return result in a tax debt, it must be paid before the relevant due date to avoid any interest for late payment and legal action,” it said.

These punishments could include fines or even criminal prosecution, it said.

Late refunds

While SARS pushes to meet its deadlines, it has also recently come under fire for failing to issue refunds timeously.

On 4 September, the tax ombudsman found that SARS’ system had unfairly delayed payment of refunds to taxpayers.

The ombud said that the findings were not only based on complaints received during the previous tax year, but over the course of multiple years.

“In the period November 2016 to March 2017, we received no less than 500 such complaints; half of which were validated. While the number of complaints received is important, this is not necessarily indicative of the financial magnitude or impact of the problem because, one claim may run into millions,” it said.

“The impact of the withholding of refunds may be devastating to the taxpayer. What appears to be a small claim may have serious cash flow impact on that small taxpayer company, or an individual.”

In a statement in July, SARS said that it is important for taxpayers expecting a speedy payment to note that it has implemented additional risk processes in 2017, to ensure that both the legitimacy and accuracy of the refunds paid.

“SARS has an obligation to both taxpayers as well as to the fiscus to ensure that fraudulent and invalid claims are stopped,” it said.

“We are aware that taxpayers have an expectation that once they submit a return, which results in a refund, that this would be paid to them shortly thereafter. It must be noted that such refunds can only be paid once all SARS processes have been concluded.”