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SARS Plugs Popular Tax Loopholes

by Robert Lee, Tax-News.com, London

03 February 2003


The South African Revenue Service (SARS), boosted by higher staffing and competence levels, has been hard at work plugging tax loopholes often utilised by businesses and their employees to minimise tax, according to a report from the Independent News Network.

Speaking to the national news service, PricewaterhouseCoopers director, Ian Wilson revealed that over the past year, the tax authority has severely limited the number of deductions which can be claimed by employees:

'A few years ago one could claim entertainment expenditure and deductions against several allowances. Now a salaried employee can only claim deduction against a travel allowance, retirement contributions and wear and tear or depreciation on assets used for business purposes,' he explained.

According to the report, the SARS is also scrutinising bogus mileage claims made by employees with car allowances, and situations in which deskbound workers receive the allowance, but don't travel for business purposes.

'We are focusing on all areas where taxpayers are non-compliant, including employees' tax abuse, VAT refund fraud, cash businesses and non-disclosure and underdeclaration of income,' an SARS spokesman announced last week.


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