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SARS Verification and Requests for Relevant Material
- 10 October 2024
- Tax Administration
- Johan Heydenrych
SARS published a document entitled “Annual Performance Plan 2024/25” in which it elaborates on 9 key strategic objectives.
Strategic objective #4 is to “Develop a HIGH performing, DIVERSE, AGILE, ENGAGED and EVOLVED workforce”
The tasks of employees are described to “have become less administrative, more analytical and service oriented. SARS’ employees easily collaborate to leverage their combined strengths, and it invests in them appropriately and provides them with the right tools for the job.”
Many taxpayers have experienced a dramatic increase in Requests for Relevant material by SARS. Some taxpayers believe that they have become a target of SARS. This is however not the result of SARS necessarily targeting certain individual taxpayers but due to an evolution of the auditing capacity of SARS. SARS employees have available sophisticated data analytics and 3rd party reporting that enables SARS to ask more intelligent and probing questions often leading to revised assessments.
Within this environment, it is important for taxpayers to:
- Ensure that tax returns are only submitted following a robust process that will withstand SARS scrutiny. This includes the preparation of a tax pack that contains all relevant information that may be requested by SARS.
- Ensure that tax uncertain positions are identified prior to the submission of any return and addressed in accordance with an acceptable risk management framework.
- Ensure that eFiling is pro-actively managed so that SARS queries can be dealt with timeously.
- Ensure that the Requests for information and relevant material are dealt with clearly, comprehensively without ambiguities.
SARS and the taxpayer must understand their rights and obligations in terms of the Tax Administration Act. Taxpayers must for example retain records as required by the law, but the request for material by SARS should be limited to what is “relevant” for the particular review. It could for example be strongly argued that a request by SARS of the internal audit reports may not qualify as “relevant material” being simply a “fishing exercise”.
There is little doubt that SARS is highly capable and empowered, not only legislatively, but also by the appropriate technology to identify non-compliance. Taxpayers should not underestimate the capabilities of SARS and significant resources and effort should be expended by taxpayers and their advisors to reduce the risk of costly disputes arising with SARS.
Join Johan on October 22nd where he will cover the proactive identification of tax risks, disputes over facts or law, and available resources for legal contraventions. He’ll also provide practical examples for handling Requests for Information across Income Tax, VAT, Employment Tax, and Dividends.
- Click here to view a short introduction video.
- Click here to read more and book your seat.