After mounting complaints about delayed tax refunds, the Tax Ombudsman released a report on Monday, 4 September with the results of their investigation.
They found that at least 500 complaints were made against the South African Revenue Service (SARS) between November 2016 and March 2017, and no less than half of these complaints have been validated.
“The impact of the withholding of refunds may be devastating to the taxpayer. What appears to be a small claim may have a serious cash flow impact on that small taxpayer company, or an individual,” the report read.
In addition, this number may not be indicative of the financial magnitude of the problem, since one complaint may amount to millions.
The report by the Tax Ombudsman did not only look at complaints from the previous tax year, but also from the years before.
“The historical background will show that not only has there been a build-up of complaints about delayed payment of refunds, but that the issue was raised in various reports submitted in the past, to parliament and to the commissioner of SARS,” the report continued.
As part of the investigation, SARS was given an opportunity to respond to a preliminary report.
In their response, SARS said the delays were caused by, among other reasons, their IT setup struggling to link documents to their system, and fraudulent claims.
“The ultimate wish by the taxpayers is that these mechanisms be eliminated out of the system; otherwise, be implemented in a manner that would cause the least possible delay in the payment of the refunds,” the report read.
According to Marc Sevitz, director and CFO of Tax Tim, the Tax Ombudsman’s report was important because it highlighted where SARS developed gaps over the years and how this can be improved.
“Often when systems get older, these sorts of issues creep in and it’s important that they be checked and monitored so when things start to happen, as we have seen, then they can be rectified,” Sevitz explained.
He hopes the report will result in SARS taking constructive and timeous steps to remove further unnecessary delays.
What should you do if you have not received your tax return?
According to Sevitz, SARS should pay out within 21 working days. If this does not happen, you need to check whether your banking details are correct or if any prior year’s returns are outstanding.
You can do this by calling 0800 00 7277. If these are not outstanding, then you can ask the call centre to escalate your query which again should be resolved within 21 working days.