SARS can search without warrant

The Tax Administration Bill was promulgated yesterday in the Government Gazette. SARS expected it to come into operation in the next three months, it said. It contains a clause that permits a warrantless search.

SARS spokesman Adrian Lackay said yesterday searching without a warrant will be in “narrowly defined” situations.

“It will mostly be in cases of crime where we get to a premises and find evidence is being destroyed,” he said.

SARS got legal opinion on the constitutionality on the specific clause in the act from two senior counse ls, Gilbert Marcus and Steven Budlender, who found it to be in order.

Lackay cited an example in Durban where SARS staff had to stand by helplessly while a suspect burned documents and financial statements in the courtyard of his offices.

via Bill gives SARS more teeth – Times LIVE.

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SARS becomes stricter

Tax Preparation

In this respect, SA falls in line with a world wide trend: the discernible flexing of muscle by tax administrations in a bid to generate extra revenue. For many countries this is a knock- on effect of the global financial crisis; for many African countries, enhancing domestic revenues is also crucial to reducing dependence on foreign assistance.Whatever the local imperative, the environment has never been riper for tax controversy in developed and emerging markets.The worry for companies is that aggressive clampdowns by a country’s revenue authority can lead to prolonged, burdensome wrangles that can ultimately render it inefficient for firms to continue doing business there .But an important policy shift is taking place, of which business, especially multinationals, should take heed: not only are tax administrations becoming more aggressive, they are becoming more effective. It emerges from a recent global survey by Ernst & Young that taxpayer data is being shared by tax administrations as never before , while multilateral tax enforcement efforts are growing.The Joint International Tax Shelter Information Centre is an example of this collective approach, as is the recent signing by SA and 12 other countries of the convention on mutual administrative assistance in tax matters.But perhaps the most chilling manifestation of this increased co-operation between tax administrations is the dawn of the joint audit investigation, which is a simultaneous examination of a multinational by the tax authorities in a number of jurisdictions .In the face of this phalanx of revenue scrutiny, it is perhaps of some comfort to be aware that tax administrations recognise that to be effective they need to co-operate with taxpayers and engage with them in dialogue.As the chairman of the African Tax Administration Forum Ataf, Oupa Magashula, said recently: “Experience has proven that there are distinct and tangible benefits for both revenue and business, as well as their advisers, to engage in more consultative and collaborative relationships.” While at present Ataf has no formal procedure to facilitate engagement with investors, Magashula has said he would welcome suggestions from business on a possible African engagement strategy.However, Ataf has also been vocal about the need to bed down measures to stem tax avoidance and evasion in the region, saying developing countries lose revenue through the siphoning of money to tax havens.The recognition by tax authorities that dialogue with taxpayers is integral to effective tax collection is encouraging. But for it to be meaningful, authorities should resist the temptation to paint all multinationals with the same brush. Just as emerging markets can differ considerably from one another and should not be regarded by investors as homogeneous, so it must be recognised that multinational companies often differ markedly from one another in approach, behaviour, policy and their philosophy on tax matters.Realistic communication between tax authorities and taxpayers should engender a more holistic appreciation of what multinationals are doing and lead to a less confrontational position being taken by all sides.In the meantime, routine information sharing between tax authorities, together with more sophisticated risk assessment and audit methodologies, mean that tax risk management needs to be securely embedded in companies’ approach to corporate governance .

via On my mind – Tax laws-Tax muscle-flexing.

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Five things every taxpayer in South Africa should know

The third draft of the long awaited Tax Administration Bill “TAB” was recently published for a final round of public comment. The TAB is an initiative to incorporate certain generic administrative provisions, which are currently duplicated in the different tax acts, into one piece of legislation. Since the TAB is now nearing the final stages of the legislative process, every taxpayer requires a basic knowledge of its implications.

Know your new identity

The TAB provides for a single registration system whereby taxpayers will register for all tax types by means of a single registration form. For example, an enterprise will no longer have to register separately for income tax and value-added tax. The South African Revenue Services “SARS” may, however, allocate various reference numbers to one taxpayer to differentiate between various tax matters. Should the taxpayer correspond with SARS without mentioning the allocated reference number, SARS may disregard such correspondence.In most instances, registration must take place within 21 business days from becoming liable or entitled to register under a tax act. “Business days” now also excludes days from 16 December to 15 January each year. Do not be surprised if SARS asks you to wink at them while you register, as “biometric information” may now be used to authenticate the identity of an individual. This includes any biological data, such as retina, voice, facial or fingerprint recognition. SARS is, however, obliged to put measures in place to secure the confidentiality and protection of such personal data.  In line with the single registration system, a single taxpayer accounting system will also be introduced. Taxpayers will have one tax account with a rolling balance of all outstanding taxes. Payment allocation rules may be applied in respect of a specific tax type and SARS may recover taxes by applying the first-in-first-out rule. This could give rise to some interesting issues where the amounts of certain taxes are in dispute and others are not.

via Five things every taxpayer in South Africa should know – Lexology.