Be aware when you have outstanding tax debt as the Tax Administration Act 2011, as amended (TAA), empowers the Commissioner of the South African Revenue Service (SARS) to appoint a third party to withhold and pay over to SARS any amounts due by a taxpayer in terms of the relevant tax Act. Such a third party may be an employer of the taxpayer or any other person who has the management, custody or control of any income, monies or property of the taxpayer.
Therefor SARS has the power to reach into your bank account and take the money that you owe from your bank account. This happens sometimes without notifying you. Taxpayers must be aware when SARS make efforts to communicate with them.
The French Revenue Authority is known for having directed this tactic. In France, even if the Revenue Authority has no basis to collect outstanding funds, you will be held responsible for the legal fees if there is some liability on your part, such as not replying to notices or not having kept your taxpayer details up to date.
Taxpayers are especially annoyed if SARS acts on a false tax debt or if proper procedure is not observed. SARS is required to follow the procedure prescribed by the act, which imposes procedural requirements on to it – for example, to send a final demand 10 business days’ before it proceeds with the collection.
However, there are cases in which SARS has withdrawn funds from taxpayers’ accounts without them being notified. Whether this is a result of deficient communication from SARS or a blatant disregard for the prescribed tax procedure is not relevant, as the withdrawal can be reversed either way.
The law must protect society to ensure that everyone pays their taxes and persons/companies who do not comply with it, must effectively be dealt with. Unfortunately, the innocent taxpayer is also subject to these strict provisions and can be treated negatively.
Some tips to assist in the future. Draw a “statement of account” from your SARS e-filing profile to ensure that you do not owe money to SARS. If the statement shows an outstanding amount, even if it is incorrect, you must immediately contact SARS to sort out outstanding debt.