Taxpayers warned of tax fraud

By Jurina Nkwazi
4 November 2010

The South African Revenue Services has warned taxpayers not to become victims of tax fraud when they are approached by individuals who promise them a tax refund.

This follows the arrest of three suspects for tax fraud after a six month investigation.

SARS Spokesperson Adrian Lackay said, “The suspects allegedly managed to persuade a number of taxpayers from a particular section of the tax base to use their services to submit fraudulent tax refunds to SARS.”

Furthermore, taxpayers have been urged to demand proof of identification and proof that the intermediary is registered with SARS as a tax practitioner from the tax intermediary or someone posing as a SARS official.

Lackay said, “About 36 000 letters of demand have been sent to taxpayers who may have received irregular refunds after claiming for false deductions like travel expenses and medical deductions.”

Where these taxpayers are unable to substantiate their claims, they are obliged to pay back the refunds and face up to 200% penalties and possible criminal prosecution.

SARS wants to encourage any taxpayer who may have fallen prey to such scams to come forward and assist SARS with information in order to arrest more suspects.

"The taxpayer remains legally accountable for all information on their tax return, even if it is completed by a third party on their behalf,

"SARS offers a free advisory service to taxpayers to help them submit their returns accurately and honestly at any SARS branch," Lackay said.