Are You Struggling to Get Your Tax Refund?

There is a feeling that taxpayers are getting fed up over the amount of tax they have to pay. Add to this the adverse publicity SARS has received as one of the focal points of the current political struggles and the string of suspensions/dismissals of senior SARS officials.

Despite this, statistics for the months April to July show that government finances are on track to deliver on the Budget outlined by the Finance Minister in February. True, collections are a little down but this is more than offset by lower government spending.

Tax refund delays – what’s going on?

One of the cornerstones of the efficient systems run by SARS is the speed at which tax refunds are paid – normally 48 hours after an assessment is made or a verification process is completed. Yet there is a steady stream of complaints from taxpayers and the financial press of frustrating delays experienced by taxpayers due a refund.

Taxpayers due refunds are finding themselves subject to verification processes which is standard. What frequently happens is a taxpayer being asked to personally go to a SARS office with their FICA and banking details. Many are being asked to do this more than once and discovering there is still no tax refund. Tax practitioners are also finding that their clients have been placed on “Special Stoppers” and neither they nor the client are informed. In many instances the frustration is exasperated by unclear or a total lack of communication and clarification from SARS.

SARS has increased their controls over refunds due to increasing criminal activity and the high amount of fraud taking place. They have been ambivalent, though, in their explanation for the actual refund delays – on the one hand admitting there is a problem but then stating that these delays relate to 5% of tax submissions and taxpayers must expect delays.

Some light at the end of the tunnel – perhaps

SARS has been promising an updated Tax Service Charter which hopefully will be released soon and will address this issue. There is a proposal before Parliament that the Minister may direct the Tax Ombud to investigate “systemic issues” relating to service.

In the meantime, taxpayers suffer the cash flow consequences. This is particularly severe on small businesses and individual taxpayers and addressing fraud without collateral damage is becoming a matter of desperate urgency.