The systems upgrade to deliver on this long term goal is estimated to take another three years to complete. While this timeline, compounded by the talent exodus, has been a temporary setback for SARS, it should not be seen by taxpayers as something of a “gap” to escape the long hand of the law. SARS has recently released a statement asserting that although change is underway, they are still actively working to detect current non-compliant taxpayers.
The ongoing drive to identify these taxpayers will lead to SARS being critical to tax errors, whether this negligence is intentional or not. SARS is encouraging taxpayers who have found themselves to be negligent, to exercise accountability, rather than endure the haunts of their taxpayer past.
There are a few options to consider for taxpayers wishing to rectify their haunting tax history or sustain their current compliance:
- The most proactive solution is for taxpayers to utilise the VDP (Voluntary Disclosure Programme) application. This allows individuals to legally declare any undeclared assets and provides leniency on the penalties that would have occurred had they not done so. This is especially encouraged for non-compliant taxpayers who SARS has not yet pinpointed.
- Should this not be done before being identified by SARS, individuals can pull on one last lifeline with the Compromise of Tax Debt application. This aids individuals and corporations alike in reducing their tax liability and providing a reprieve. Once an agreement is proposed and accepted, the remaining balance of the liability is written off by the revenue authority.
If you find yourself in the shoes of a non-compliant taxpayer, the first-mover advantage offered through the VDP is the comparative “soft landing”. It is important that this avenue be utilised correctly to ensure the lowest penalty possible. If, however, you have already received communication directly from SARS regarding the non-declaration of your assets, the VDP avenue is unlikely to be available for you. Such correspondence from SARS requires an immediate response by an income tax specialist to ensure you are safeguarded from SARS’ collection measures.
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