While many SA businesses are either not registered for tax or are paying very little tax, SARS is taking a ‘shotgun’ approach to attacking large tax-compliant corporates. Major SA corporates employ dedicated tax managers who spend between 50% and 80% of their time dealing with multiple queries from multiple SARS offices, claiming they are ‘under siege’.

In an analysis on the Moneyweb site, Bowmans’ Kelly Wright says Corporates spend enormous amounts of unproductive time and money fielding SARS queries and dealing with disputes. ‘A single dispute can easily span between six years and a decade, from the date of the first request for information from SARS to the date on which judgment is handed down by the SCA.’

However, she says, winning the dispute is often a hollow victory.

When corporates win disputes with SARS, they have to spend years fighting to claim refunds that are delayed for no reason.

‘This year’s legislative changes may bring more certainty, with set percentages of impairment losses being claimable in the future. However, these allowances are substantially less than the actual economic loss suffered by taxpayers, resulting in over-payments of tax in earlier years, which the Law Society of SA likens to a permanent interest-free loan from taxpayers to SARS.’

Wright says with SARS’ seemingly ‘unrelenting focus’ on corporates, there is growing frustration that non-compliant small businesses are getting off scot-free. Also, with public attention on corruption and misuse of taxpayer funds, and the ‘capture’ of SARS, taxpayers have become disgruntled.

‘It feels as if we have reached a stage where paying tax is voluntary and those who volunteer are penalised. The time has surely come for SARS to broaden the tax base and go after the taxpayers that are unregistered or underpaying.’

Full analysis on the Moneyweb site