South Africa to prosecute taxpayers who fail to submit returns

25/04/2018 News Team

Non-compliant taxpayers, including prominent South Africans, who have failed to submit returns will be prosecuted and will end up with a criminal record by the South African Revenue Service (SARS) in a new initiative with the National Prosecuting Authority (NPA).

The campaign marks an intensification of SARS’s Outstanding Returns Project that was launched towards the end of last year when SARS aimed to raise awareness amongst taxpayers about outstanding tax returns.

SARS has over the past few years experienced an increase in the non-submission of returns across all tax types, including PAYE, VAT, corporate income and personal income tax.

At the end of March 2018, SARS’s Outstanding Returns Book showed that active taxpayers owed SARS approximately 30 million returns, in many cases showing that multiple outstanding returns were due by a single taxpayer. 

During the week of 16 April, eight outstanding return cases involving hundreds of outstanding returns appeared on court rolls in different parts of the country – including four cases in the Johannesburg Magistrate’s Court on 19 and 20 April.

There were also cases in Ficksburg and Bothaville in the Free State, as well as the Newcastle Magistrate’s Court in KwaZulu-Natal during the rest of the week.

The significant drop in the submission of returns was one of the key indicators pointing to decreased compliance and was highlighted by Finance Minister Nhlanhla Nene during the announcement of the tax revenue collection figures for the 2017/2018 financial year.

The decision to resort to enforcement of compliance through criminal prosecution is a last resort. All the taxpayers that will appear in court were engaged beforehand and final demands were issued to them before the criminal cases commenced. At this stage 36 dockets have been handed over to the NPA.

Failure to submit a tax or VAT return is a criminal offence in terms of the Tax Administration Act and Value-Added Tax legislation.





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