South African taxpayers’ trust in the South African Revenue Service (SARS) has increased in 2022, according to PricewaterhouseCoopers (PwC) South Africa’s 2022 Taxing Times Survey.
The survey was designed to not only measure corporate taxpayers’ recent experiences with SARS, but to also highlight key areas of success as well as areas for improvement at the organisation.
Some noteworthy changes at SARS include its new leadership, the restructuring of the organisation, the allocation of resources in 2021 to re-capacitate SARS (including people and technology), and improvements in the tax enforcement realm.
Elle-Sarah Rossato, Tax Controversy & Dispute Resolution partner at PwC South Africa, said: “We have seen SARS make some considerable shifts in an effort to meet its nine strategic objectives that are aligned to its new ‘Vision 2024’ — which is ‘to build a smart, modern SARS with unquestionable integrity, trusted and admired,’ as stated by the commissioner of SARS. This has resulted in a considerable push to drive recruitment and ultimately increase the staff complement, as well as to improve technology platforms, that is, making it easier to comply with taxpayers’ tax obligations. It has also resulted in SARS communicating better with stakeholders to assist in identifying areas of possible improvements.”
Additionally, SARS introduced several new units including the High Wealth Individual Taxpayer Segment and Illicit Economy Unit. The Large Business and International Tax division (LB&I) is also in the process of modernisation to improve service delivery to its large clients, as well as to focus on non-compliant taxpayers.
The survey, which is the fifth in the annual series, was based on the responses of 178 corporate taxpayers who were surveyed between May and July 2022.
Key highlights from the survey include:
• Forty-five percent of respondents say their trust in SARS has improved in the last 12 months. Where trust has improved, respondents indicate that this is due to media coverage of large investigations and fraud that is uncovered.
• Participants also indicate that there is a 47% likelihood of being selected for verification after submission of their tax returns. This is a 6% improvement from 2021.
• From a debt management perspective, 25% of participants indicate that SARS accepted their suspension of payment application pending the outcome of their disputes.This is a 9% improvement from 2021.
• There was a 50/50 split in the response among participants to the contentious issue of success with a request for reduced assessment.
• While participants indicate that VAT verification (after submission of supporting documents) took mostly between three to six months to finalise, 22% (up from 9% in 2021) of them believe the payment of VAT refunds was made within 21 days after finalisation of verification.
• Forty-five percent of participants are in agreement that it has become easier to comply with their tax obligations. This is a positive statement and aligns with one of SARS’s strategic objectives, that is making it easier for taxpayers to comply with their tax obligations.
• Seventy-one percent of participants say they do not believe SARS improved on delivering quality outcomes and performance excellence over the past 12 months.
• On how taxpayers feel about SARS sticking to time frames, 78% disagree that the organisation complies with set time periods, and as a possible result, many taxpayers turn to their tax consultants or the Tax Ombud’s office for assistance in this regard.
• Finally, on the Voluntary Disclosure Programme (VDP) front, 55% of participants indicate that their VDPs were rejected on the basis of it not being voluntary, with 78% stating that the underlying reason was that SARS believed the taxpayer was under audit. In the last financial year, the VDP contributed to more than R3 billion of revenue for SARS.
Jadyne Devnarain, Tax Controversy & Dispute Resolution associate director at PwC South Africa, said: “The survey outcomes serve a dual purpose. On one hand it enables us to understand taxpayers’ pain points when dealing with SARS and constructively assist and support such taxpayers. On the other hand it is an equally good platform to engage with SARS about how it can improve public trust, efficiency and confidence in the tax administration system, and improve its stakeholder relationships.”
BUSINESS REPORT