The South African Revenue Service (SARS) has again been pulled to the court over how a third party collected money on its behalf.
In the latest case, the High Court in Pretoria ruled that Absa must repay R1.3 million that it withdrew from the company Autumn Skies’ bank account on behalf of SARS.
The ruling follows a similar ruling when Standard Bank was ordered by the court to repay R1.2 million with interest to the project management firm SIP.
In the case of Autumn Skies, Absa literally emptied the company’s account to pay SARS. In addition, court documents show that it was SARS that owed Autumn Skies a small repayment and that Autumn Skies did not owe SARS anything.
In the case of SIP, it turned out that although he owed SARS money, SARS did not follow the correct procedure at all to inform him of the debt before ordering Standard Bank to withdraw the money on his behalf from the company’s account.
Jean-Louis Nel, tax advocate of Tax Consulting SA, says that although SARS is legally allowed to collect outstanding debt via third parties, the correct processes must be followed.
Nel explains that in terms of the Tax Administration Act, the taxpayer must be notified of any outstanding debt and the subsequent appointment of a third party, such as his bank, to collect the tax if the taxpayer does not take steps to settle his tax matters.
“If SARS does not issue the final letter of claim properly, it may not collect the debt,” he said.
“It is a requirement under the law that SARS must issue a final letter of claim to the taxpayer, ten working days before SARS may appoint a third party to collect outstanding debt.”
Nel says what is worrying is that at present it seems that the only solution for a taxpayer who feels that SARS has not followed the processes properly is to approach the Supreme Court at great cost to order the third party to pay the money. to repay.