SARS To Hire 1,000 New Auditors To Clamp Down On Tax Evasion

by Lorys Charalambous, Tax-News.com, Cyprus

24 July 2009

In an effort to boost below-target tax revenue collection, and stamp out the proliferation of new tax avoidance schemes that have sprung up for high net worth individuals seeking to protect their assets from the ongoing economic crisis, the South Africa Revenue Service has revealed that it will be hiring additional personnel.

According to national media reports, the tax authority is preparing to hire an additional 1,000 auditors, and to focus on provinces deemed to have particularly high levels of tax evasion.

Speaking on SAfm, Acting Commissioner Oupa Magashula reportedly described the new breed of schemes for aggressively minimising tax liability as "very complicated, adventurous schemes", and suggested that some those seeking employment in the new wave of hirings were involved in the creation of the schemes, and will therefore have useful inside knowledge.

In November of last year, the SARS spotlight fell on fraudulent activity and abuse within the VAT system. New measures announced at the time included more stringent verification of applications for VAT registration, investigations of existing VAT vendors who were under the turnover threshold, and a review of risk measures for refunds.

A SARS statement released at the time explained that: "South Africa’s tax system is based on self-declaration and depends to a large extent on the integrity of taxpayers to make full, accurate and honest disclosure and pay all tax that is due. The vast majority of VAT vendors are compliant and we thank them for making their fair contribution to the fiscus.

"However, monitoring of VAT registrations and refunds over the past six months by SARS has revealed a disturbing increase in attempted fraudulent registrations and other attempts to defraud the VAT system."

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