The South African Revenue Service (SARS) has apologised to taxpayers for sending out a ‘threatening’ SMS, warning them of legal action if they do not submit their tax returns.
Tax season for non-provisional taxpayers drew to a close on Monday (23 October). The SMS was sent out to representatives of companies regarding tax returns, including those that have been deregistered or have already submitted the requisite returns.
The message told these representatives to submit their returns within 10 days and then threatened them with legal action should they not comply.
The revenue service subsequently asked taxpayers to ignore the message and submitted a public apology on Thursday. The SMS pushing has also been stopped.
SARS said that the message was intended to be a “genuine helpful reminder to taxpayers to file tax returns due and fulfil their legal filing obligation”.
However, it said that the way the message was crafted and the tone it conveyed was misaligned with that intent, “regrettably” referring to possible prosecution of taxpayers for failure to do so.
“It is generally expected that we first remind and give the taxpayers the opportunity to comply, ahead of SARS commencing legal action,” it said.
“The SMS message that was sent out earlier this week, in relation to outstanding returns, fell short of the high professional standard we seek to uphold.
“SARS therefore sincerely apologises for the manner in which this matter was handled, the frustration it may have caused honest taxpayers, and any inconvenience caused.”
The revenue service said that, while it remains taxpayers’ legal obligation to file their returns by the given due date, it would not commence with legal action until it had fully engaged with taxpayers.
“Unfortunately, SARS’ reminders are ignored by some taxpayers, which means that their situation escalates to levels where legal action may be required. Even then, they are reminded about their obligation to file the outstanding returns,” it said.
SARS said it has put the SMSes on hold.
“In this respect, SARS wishes to remind taxpayers that it remains their legal obligation to ensure that their tax affairs are regularised, where these are not in order. SARS will engage with taxpayers with respect to outstanding returns at the appropriate time.
“We need to be clear that taxpayers who continue to ignore reminders and fail to regularise their tax matters, in accordance with the law, will eventually have to answer for their continued noncompliance.”
SARS under pressure
The threatening messages came soon after tax experts warned that SARS was under pressure to boost tax collection and would be turning its attention to tax representatives.
According to Tax Consulting SA, SARS has become increasingly aggressive in its tax collections this year, and tax representatives need to tread lightly.
The group said the revenue service has rapidly upskilled its debt management teams to collect from these entities, and notices of personal liability are already being sent out.
Tax Consulting noted that, historically, SARS was known to issue Final Demands and subsequent Demand Reminders, but this is no longer the case.
“With a number of collection measures at its disposal, SARS will not hesitate to act on the 11th business day, gunning primarily for your bank balance; and where this does not meet the full debt obligation, the Sheriff may soon be knocking on your door,” the group warned.
The Notice of Personal Liability is express in its collection powers, noting specifically the most drastic of measures as the immediate go-to where there is no timeous response or the response does not satisfy SARS.
This would include legal action, where SARS will issue a notice to your bank or any other person or entity that may hold funds that are due to you. The revenue service can also sequester your personal estate.
