A planned change to legislation could mean that common errors with tax returns may be harshly penalised in future, including with jail time, Business Insider reported.
Specifically, section 34 of the draft Tax Administration Laws Amendment Bill, 2020 proposes to amend section 234 of the Tax Administration Act, which will remove the concept of willfulness (“intention) from the range of acts that constitute an offence under the TA Act. If you are found guilty, the maximum penalty is two years’ imprisonment.
It would mean that you could be guilty of an offence if you neglect to, for example,
- notified SARS of a change in registered details (addresses, bank accounts and email addresses),
- a change in public officer,
- submitting a return or document to SARS,
- responding to a request for documents or information from SARS, maintain records or pay taxes when due.
Problems that could result in harsh punishment include:
- Supporting documents being misplaced, or clerical errors, which result in adjustments to VAT returns by SARS.
- As VAT is a self-assessed tax, any adjustments to the return inevitably results in the taxpayer having failed to pay VAT to SARS on time.
- Late payments of VAT or PAYE by businesses, where a payment is only released late on a Friday night, and is not received by SARS until the next day.
- Taxpayers that are unaware they may have a tax liability due to increasing complex provisions of the tax laws, and then fail to pay the correct amount of VAT or PAYE to SARS timeously.
These considerations do not appear to concern the government, and it is likely that if passed, the threat of criminal sanction will be used by SARS to force taxpayers to comply with their obligations, particularly relating to the filing of returns and payment of tax debts.