Tag Archives: Tax

It’s time that treasury stopped being short-sighted when it comes to the wealthy!

A few years ago, during the National Budget Speech, government put a cap of R350k pa on retirement contributions. It appears that no one at treasury has given this much thought Continue reading It’s time that treasury stopped being short-sighted when it comes to the wealthy!

Official logo of the South African Revenue Services (SARS)

SARS still employing delaying tactics

The tax ombudsman recently made damning findings about SARS unreasonably delaying paying refunds. SARS, of course, denied that there is anything malicious in this. However, experience seems to show that they are still very much applying stalling tactics in their desperate search for funds.  Continue reading SARS still employing delaying tactics

Not treating customers fairly – SARS!

Something seriously dodgy is happening at SARS – just had the 3rd case of them rejecting an RA tax certificate as proof of contribution to an RA. They are insisting on proof of contributions (since inception). Shouldn’t be too difficult to obtain but so much additional work – and on what legal grounds?

Worse still is that they have applied the same ruling to pension and provident fund contributions and are insisting on proof of contributions to the fund – not that easy to get! And more costs to the tax payer.

And in a separate ruling, they went back to a 2014 tax return and outright declined the RA deduction – no reasons given and penalties imposed for underpayment of tax and outstanding interest. The call centre was clueless and the only possible reason they could offer was that the contribution was “too large”. Insanity! So it’s an objection and lots more cost to the client (who will win this one).

Open letter to Mr Oupa Magashula

Dear Sir

Part of the service offering of our financial planning business involves assisting people with their tax returns (we submit over 140 each year as well as 80 provisional tax returns). Tax is not really something that we enjoy doing nor is it a profitable aspect of our business. However, it is an essential part of the service offering as more and more people become intimidated by or disillusioned with their dealings with SARS. Do you have any idea how frustrating and time consuming it is dealing with your “company”?

Consider the following example:

This morning we received the 5th assessment that is incorrect as a result of SARS not crediting the tax payer with provisional tax that was paid and this is inspite of us having received a written confirmation from SARS noting that the provisional tax was paid (on time). Instead of being able to pick up the phone and speak to someone about this and get it resolved instantly, the tax payer either needs to go into SARS (this often involves waiting in a queue that is several hours long and will therefore result in a day’s unpaid leave) or else we need to submit an objection to the assessment. This involves unnecessary paper work and too much time. And then we need to do the follow up work and in our experience, objections can take anything from 3 weeks to 9 months to be resolved. And all this time, the tax payer is being prejudiced because of additional expenses incurred to correct an error that he/she never made in the first place. There is no “equity and fairness” in this process. Let me not even get started on the process of registering as a tax payer for the first time – whomever designed it has never had to go through it!

Now if I ran my business and treated my “customers” in the same way that SARS treats its customers, I would most probably have very few customers and would possibly even be out of business. I have said it before and will say it again; when efiling works it is fantastic, but when it goes wrong it is a nightmare. In the same way, dealing with the call centre is just about bearable when it works, but when it does not (or there is a “grumpy” agent on the other side of the line) it is also a nightmare. (And whomever came up with the idea to punch in all the data each time you call and that then needs to be repeated to the call centre agent should be reprimanded for complicating a process unnecessarily – it is not working!) In the past week alone we have spent several hours on hold to the SARS National call centre (it appears that all lines to SARS now go to this line) calls are either not answered at all or else are just “cut off” after 15-20mins of hold time. This is not acceptable and unfortunately our client experiences are not consistent with SARS core values:

“We are committed to providing excellent service to the public. Our relationships, business processes and conduct are based on:

  • mutual trust and respect;
  • equity and fairness;
  • integrity and honesty;
  • transparency and openness; and
  • courtesy and commitment.”

I understand that SARS is not really a business in the sense of a normal business but it is there to make a profit. Unfortunately, your customers dont have the choice to go elsewhere and so you have a captive market in one sense. But when you dont treat people fairly, or you make it too difficult to do “business” with your company, you foster and encourage an attitude of non-compliance…and this is not good for business and is at odds with your strategic goals:

“Our strategic goals – adopted to enable us to fulfil our mandate – are:

  • to optimise revenue yield;
  • to provide excellent service;
  • to engage in responsible enforcement;
  • to transform our people and culture;
  • to transform the business and build capability; and
  • to promote good governance.”

I guess I dont really expect things to change as a result of this letter and I am also sure that there are plenty of people who are “happy” with SARS, but you need to be aware that in the circles in which we operate, there is an increasing unhappiness and disatisfaction when dealing with SARS. And like I said earlier, it is not like we have a choice to go elsewhere, but when people are treated fairly and politely and with dignity and respect, then it is much more likely that they will comply. And that, is good for business!

This cant be good?

I know I am banging on a bit about SARS and tax at the moment but it is probably because for me it is the period when we have the most interaction with SARS – not only are we in the throes of the 2010 filing season but the 2011 first provisional tax deadline is also around the corner.

In this context I recently had the misfortune of having to go into the SARS Cape Town branch to take in an application to register a new tax payer for the first time. Why this cant be done online or via email is beyond me but SARS insist on original bank statements and certified copies of identity documents and there is no guarantee that the post will get to them (even registered mail) and so it means a trip to their offices.

Armed with the necesary I stood in the queue to get into the building…once inside I was directed to another queue so that I could hand in the forms and get a stamped copy so that I have proof that the application was indeed submitted (this is a necessary strategy anytime you take in any documents to SARS and we have been “saved” a number of times when we have been able to provide a stamped and dated copy of a document that they claimed never to have received).

I eventually got to the front of the queue to do what was the “right thing” and managed to get my copy stamped by a less than friendly official. During the whole experience I was overwhelmed by two familiar but very unwelcome emotions:

  1. I felt like I was in the headmaster’s office back at school waiting to be punished by the overly strict, mean principle (yet I was sure that I was not in the wrong in any way).
  2. The second emotion was even less welcome and took me back to the dark days of conscription…all of a sudden I was back in infantry school doing basics where my life was not my own but rather in the hands of the state who had the power (and authority) to essentially do with it as they pleased.

Now maybe I am a bit strange and maybe I have issues with SARS but when you are “doing the right thing” and also helping others to “do the right thing” (and when you know the system) and this is the over-riding feeling that comes from dealing and interacting with it, then something must be seriously wrong!

SARS offices are not the friendliest of places and most people that I know would sooner go to the dentist than to SARS…but if SARS is intent on making income tax submissions more simple so that more people can do their own returns either on efiling or by visiting a SARS branch then I suggest that they need some serious lessons in public relations and on how to deal with the public. We are, afterall, their customers and we are the people that ulimately keep them in business. Without us, SARS would not exist so perhaps it is time for a bit of an attitude change by SARS employees to the general public and more importantly, to the people who are trying to do the right thing by getting their tax affairs in order.

It’s going to be a long tax season…

My grandfather taught me that if ever I needed to write a letter in anger that it was better to write it and then wait until the next day to send it – just to check that I still felt that way and that I still wanted to say the same things when the heat of the moment had passed. It was good advice…and so it is with this post…

We currently complete and submit about 130 tax returns for clients and started submitting them as soon as the filing season opened. However, 2 weeks into the season (and 10% down) I find myself wondering if I still want to do tax for clients and if so, can clients afford to pay me to do it?

The whole aim behind efiling (as I understand it) is to simplify things and to make it easier for people to submit their returns to SARS and in thus enabling those who dont want to pay someone else to do their return to do it themselves. That’s the theory at least!

In practise it is not like this at all…if the first returns are anything to go by then SARS is in a complete mess and this is going to be a very long filing season indeed.

So far the following has happened:

  1. 8 Returns have been submitted
  2. 3 have been assessed correctly
  3. 2 have been assessed incorrectly with SARS levying incorrect penalties of R56000 & R16000 to the tax payers. They have admitted telephonically that it is an error but the process involved in getting it corrected is unbelievably complex and time consuming.
  4. 5 returns are ready to submit but of these there are 2 with outstanding tax issues from 2009 which have still not been finalised despite numerous calls and letters to SARS.
  5. 1 return has no IRP5 or any other information for the tax payer on it  (and he is not even a government employee – apparently some departments’ IRP5’s are still not available).

Not a problem, we can always call the call centre (a dedicated line for tax practitioners)…

Give it a try some time – so far it has been out of service at least twice, we have been cut off twice, the “pre-populated” information that needs to be entered is not working and the average waiting time is also too long in my opinion! So if this is anything to go by then this is going to be a very long and very trying filing season.

When efiling works it is brilliant, but when it goes wrong (for whatever reason) it is awful. I just wish that SARS would be honest and admit (publicly) that there are issues with their systems and that they are working on them.

But what is going to happen (again) is that the very people that SARS are trying to help (the individual tax payers) are going to get prejudiced by the complex way of doing things – they will either have to go and stand in a very long queue outside the SARS building (which in some cases has been days long) or they are going to have to pay someone to submit their returns for them.  And based on my conversations with colleagues, thanks to SARS, the price for submitting returns has just gone up!

So start saving or start standing in the queue…

SARS – just like Alice

I had to make a trip to SARS in Cape Town this am to hand in the 6 paper provisional tax returns that I cant get on efiling – this is despite several email and telephonic requests to SARS to get them on e-filing.

As I arrived there I was greeted by the site in the picture below…

this is a many-hour queue (and it has been like this since November last year according to the SARS lady that helped me). Fortunately, I did not have to stand in line as I just needed to hand in docs and get stamped copies.

The whole exercise has got me thinking about SARS and e-filing and just how much like Alice SARS is…

For those of you who dont remember Alice (it is not a reference to the song) but rather to the little girl with the bump in the middle of her forehead. When she was good she was very good but when she was bad she was horrid!

And so it is with SARS and e-filing – when it is good it is excellent, but when it goes wrong it is awful! It is hard to argue or reason with a computer and even more so with a disinterested clerk at the other side of the call-centre telephone line.

Despite this though, e-filing is on the whole still brilliant – if you are not registered to e-file your annual and provisional tax returns then you are welcome to join the queue. Guess I will see you in August when I make my next trip to SARS to submit the few paper returns that I still cant get on e-filing – but at least I wont be waiting in any queues.