Each year National Treasury and the South African Revenue Services (SARS) issue amendments to the regulatory framework to address changing economic realities, improve administrative processes and plug loopholes. This year was no different with the 15 January 2021 assent to the Rates and Monetary Amounts and Amendment of Revenue Laws Act (Rates Act); the Taxation Laws Amendment Act No. 23 of 2020 (TLAA); and the Tax Administration Laws Amendment Act No. 24 of 2020 (TALAA). These Acts were promulgated on 20 January.
1. SARS can withhold your refund if you are under criminal investigation. In terms of the Tax Administration Act, SARS is entitled to withhold refunds owed to taxpayers in certain circumstances. The TALAA expands these provisions to determine that if you are subject to a criminal investigation in terms of the Tax Administration Act, SARS is entitled to withhold any refund it owes you, pending the outcome of the investigation.
2. Criminal sanctions for minor tax offences. Previously, a taxpayer would only be guilty of a criminal offence for non-compliance under the Tax Administration Act if they “wilfully” failed to comply with their tax obligations. With the new amendments, non-compliance will constitute a criminal offence where it is as a result of the taxpayer’s negligence. In other words, intent is no longer required; where you are non-compliant as a result of ignorance of your obligations, you may be found guilty of a criminal offence. These offences are subject to a fine or imprisonment of up to two years.
The most important change that applies to all taxpayers is the one that criminalises negligent non-compliance; this and other administrative changes mean that taxpayers will be held to a higher standard, which serves as a cue for everyone to take ownership of their tax affairs.
The best advice, it would seem, is for taxpayers to seek assistance in handling their tax affairs.