Legal Articles and Guides

A Cape Town tax practitioner has been jailed for five years for defrauding SARS of more than R690 000. According to the prosecutor, Advocate Lunga Ntshokoma of the specialised tax unit, John Bantam swindled the taxman over a year while working for a reputable chartered accounting firm.

SARS is getting its money back from a Cape Town businessman‚ his son and their bookkeeper who stole R615 000, notes a TimesLIVE report. Thomas Fortuin‚ Tom-Ross Fortuin and Ivor Carolissen were convicted yesterday of 382 counts, including fraud‚ forgery‚ uttering and failing to submit income tax returns. The men entered into a plea bargain with the state in the Cape Town District Court.

A suspected kingpin of a multimillion-rand abalone enterprise told the Eastern Cape High Court (Port Elizabeth) this week that he was too uneducated to know that he needed to declare tax to the SARS while living the high life. According to a report on the IoL site, Julian Brown, a high school dropout, was testifying at his trial where he is being prosecuted for a string of charges which include racketeering between January 2015 and April 2016.

A Mitchells Plain tax practitioner has been found guilty of more than 100 fraud charges after he submitted false income tax returns for 28 taxpayers, says a Cape Argus report. John Bantam was convicted of 121 counts of fraud by the Bellville Regional Court.

SARS has warned taxpayers that they could be penalised if they do not declare cryptocurrency gains and losses. According to a Business Day report, SARS said it deemed cryptocurrencies – such as bitcoin and ethereum – as intangible assets, rather than ‘a currency for income tax purposes or capital gains tax’.

Several taxpayers have received threats from SARS that they are facing legal action because their tax payments are in arrears, says a Business Day report. However, it appears many of these taxpayers have filed objections to the assessments issued by SARS.

The Hawks have confirmed that an investigation into the second-in-command SARS executive and alleged money-launderer Jonas Makwakwa is ongoing, says a HuffPost SA report. Makwakwa was returned last week to a crucial job at the under-performing revenue authority after a year's suspension. SARS spokesperson Sandile Memela said the executive would not be suspended again following the Hawks confirmation that an investigation is still in progress.

South Africans have declared almost R35bn worth of foreign assets under the government-initiated special voluntary disclosure programme (SVDP) that closed last month, according to Finance Minister Malusi Gigaba. He said that 2 002 SVDP applications were received by the cut-off date of 31 August, and the government had already identified over R1bn in tax liabilities.

The Treasury has agreed to significantly amend its proposal to repeal the 183-day tax exemption on income earned abroad by retaining the exemption and introducing a R1m ceiling on what can be claimed under it. A Business Day report says implementation of the proposal will also be postponed until 1 March 2020 instead of the initially proposed 1 March 2019 in order to give individuals more time to either adjust their contracts or their circumstances or to formalise their tax status, as is deemed necessary.

Tax experts yesterday urged National Treasury to give careful consideration to the economic implications of repealing a provision that exempts certain South Africans who work overseas from paying tax in SA. According to a Fin24 report, Parliament’s Standing Committee on Finance hosted public hearings to allow stakeholders to give input on a range of new tax proposals from National Treasury.

The Treasury has proposed to remove the foreign employment income tax exemption for South African residents working abroad from March 2019. Treasury deputy DG Ismail Momoniat said the aim was to make sure that the tax system was fair to all and that people did not exploit offshore tax havens.

Taxpayers will in future have to appear in person at a branch office of the SARS if any of their details registered with the agency change. In the past this verification was necessary only when the taxpayer’s banking details changed. However, they will have to visit a branch if a telephone number or an address changes, notes a Moneyweb report.

Government’s decision to increase the rate of a dividend withholding tax and apply it from 22 February 2017 when the Budget Speech took place creates tax uncertainty, Parliament was told yesterday, according to a Fin24 report. The Standing Committee on Finance hosted public hearing on the Rates and Monetary Amounts and Amendment of the Revenue Laws Bill, which will enable tax rates changes announced during the 2017 Budget.

A recent SCA tax case demonstrated quite clearly how paying tax under a ‘statutory obligation’ might seem ‘unfair’, but that there was nothing ‘unjust’ about it, says a report in Business Report. In this case the taxpayer – a company – sold a property for a huge gain, was taxed on the capital gain, but was not paid the total amount. However, the company remained liable for the original capital gains tax assessment.

An unexpected R5.4bn dividend tax windfall enabled SARS to hit its target for the latest tax year, despite shortfalls in other taxes – which a Business Day report says raises questions about what might come to SARS’ rescue as it works to meet even tougher targets in the coming year.