SARS warn taxpayers not to fall prey to fraudsters

by , 15 October 2013

With just over a month left until the deadline for individuals to file their tax returns, SARS issues a warning. The Revenue Service says that people should avoid using tax advisers who claim they will definitely get the individual a tax refund. Let's take a closer look at what's going on...

Earlier today, SARS told “taxpayers to exercise caution against tax advisers” guaranteeing a tax rebate, reports IOL. The tax authority said that a promise of this kind is “highly misleading and should be avoided”.

This as taxpayers who have left it late to start the tedious task only have just over five weeks to submit their returns. The deadline is Friday 22 November.

Marika Muller, a spokesperson for SARS, said that the body has seen “an increase in fraud cases involving personal income returns,” says the SABC. This appears to happen in cases where the apparent tax advisor promises “clients substantial tax refunds in return” for a substantial share of the refund. This can be up to 50% in some cases.

SARS' investigations reveal the extent of the fraud

This follows raids SARS made at the beginning of September in Mpumalanga, says BDLive. This led to the “arrests of 28 people who had submitted fraudulent income tax returns” for about 200 people.

These raids led to claims amounting to “just more than R7 million,” adds BDLive.

SARS suspects that “syndicates were involved,” reports Fin24.

SARS is also dealing with a case of one tax practitioner who faces “290 counts of fraud and 145 counts of allegedly making fraudulent tax assessments for evasion,” adds Fin24. This case adds up to losses of about R1.5 million.

And if you're concerned about using tax professionals, here's some expert advice...

The South African Institute of Tax Professionals' legal and compliance officer, Chris van Dyk, says that this form of charging a slice of the refund was not allowed since 1 July , says BDLive. This is the date when all tax practitioners had to be regulated.

To ensure you pick the right person for the job, make sure the adviser is “registered as a tax practitioner with both SARS and a recognised professional body,” adds BDLive.

And if you've not started on that return yet, you better get cracking.

SARS warn taxpayers not to fall prey to fraudsters
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