SARS red tape is killing business

[Blurock]

The mission statement of SARS reads "to facilitate trade and to enlist new tax contributors"...

Well, they are not facilitating my business, they are actually harming my business. We have jumped through hoops since July, but still no VAT number.

Not having a VAT number means that you can not trade effectively as people see you as Mickey Mouse or a fly-by-night. All the registrations you have to do for a new business requires a VAT number.

As a manufacturer with a potentially high turnover, our VAT registration is not voluntary, but compulsory. So why the hold up? They are drowning us in red tape "because of all the tax fraud". Well, don't make your problem my problem. Choose a better government that will stamp out corruption and train an effective police force to catch the criminals.

Bloody bureaucrats!

As an example: As proof of address, we provide SARS with a letter from the landlord, an invoice and statement showing a few months history of paying rent and bank statements showing the rent paid. No, this is not good enough, they want a signed copy of ALL the pages of the lease agreement. That's the rule and that is what they want. Stuff you, stuff the environment, stuff the trees required to print almost 30 pages.

[Justloadit]

Have they got qualified personnel that can EVEN validate that it is a genuine lease or correct paperwork?
No wonder there is tax fraud, the werkers at the department only got 30% at school, now they are supposed to regulate beeg industry........

[Blurock]

I suppose our VAT application is now gathering dust in someone's office and in 6 month time we'll have to re-apply because it would get lost under all the new applications being dumped on the pile...

[Blurock]

We have now finally received our VAT number, after escalating it to SARS Service Monitoring Office (SSMO) ssmo@sars.gov.za. The branch was given 15 days to sort out the registration, but it took them 3 weeks! They never requested further information, had no follow up interviews or even visited our premises. So was the delay out of spite or incompetence?

In the initial application, the VAT101 was only captured on the SARS systems 33 working days after the actual acknowledgement of the receipt. This is in spite of follow up letters and visits to SARS to find out if they actually required any other supporting documentation to finalise the registration. Call centre enquiries stated only that the application is supposedly “In Progress”.

This the SARS Vision Statement:

SARS is an innovative revenue and customs agency that enhances economic growth and social development that supports the country’s integration into the global economy in a way that benefits all South Africans.

In my opinion they are not living up to their vision. We are a manufacturing concern creating meaningful direct and indirect employment. We are replacing imports which saves the outflow of revenue. We will soon be exporting, which will generate additional revenue. The almost 3 months it took to register a COMPULSORY VAT registration, harmed our business and delayed our marketing efforts. We could not register on supplier data bases as no-one will deal with a manufacturer that does not have a VAT number. It is also impossible to tender for any work without a VAT number.

We were placed at a price disadvantage to our competitors as we could not claim back any input VAT. We had to also delay staff employment as we could not go into full production foregoing our input VAT on raw materials etc.

Do we now blame foreigners for not investing here? Why do we have to put up with this?

[Houses4Rent]

If early indications are anything to go by, South Africa’s new tax ombudsman is going to have his hands full.

Although only officially launched by finance minister Pravin Gordhan last month, the office of the South African tax ombud has been at work since October last year. It has since been approached by more than 670 taxpayers for assistance.

“This includes not only complaints, but also questions about the process of lodging a complaint and other related uncertainties,” explains tax ombud chief executive Eric Mkhawane.

At the helm of the ombud’s office is retired judge Bernard Ngoepe who, along with a team of experts, is dealing with legitimate complaints by taxpayers.

This includes any grievances relating to administrative issues, poor service and procedural matters that cannot be resolved through the South African Revenue Service’s (Sars) usual internal mechanisms.

The ombud’s office also facilitates access to a complaint resolution process and guides taxpayers according to the process that needs to be followed.

The tax ombud may, however, not address any legislative or policy issues.

Says Mkhawane: “We cannot get involved in matters before court. Of the 673 queries we received, 61 fell within our mandate and we were able to finalise 70% of them. The remaining complaints are still within our turnaround time-frame and we are in the process of finalising them.”

He says the ombud’s office aims to deal with a complaint within 15 days upon receiving the necessary supporting documentation.

“There are however situations where this period is not sufficient, but we will inform the taxpayers when this is the case and provide them with regular feedback about the process,” says Mkhwanane.

To date, taxpayers who have made use of the ombud’s services include individual taxpayers as well as business owners. The complaints cover a wide range of issues from not having received tax refunds to the correct Sars processes not having been followed.

Spokeswoman for the National Treasury, Phumza Macanda, says taxpayers can lodge a complaint with the tax ombud once they have followed Sars’s complaint procedures, which includes first contacting Sars directly through a branch or through the Sars contact centre.

“If the desired outcome is not reached, the matter should then be escalated to the Sars Service Monitoring Office,” says Macanda.

However, Mkhwanane says there are some cases with compelling circumstances that allow taxpayers to contact the ombud’s office directly before going through these processes.

“This will only be in case of an emergency when time is of the essence and going through the internal process first could negatively impact the taxpayer,” he points out.

The first step to lodging a complaint is to supply the tax ombud’s office with the necessary supporting documents.

Those business owners interested in lodging a complaint with the ombud need to fill in a complaint form, which can either be found on the tax ombud’s website, or which can be faxed or sent via email on request.

As well as the necessary supporting documentation, complainants must also provide their contact details and information on the complaint.
Mkhawane believes that now that the tax ombud has officially been launched, the number of complaints will increase.

“Recently Judge Ngoepe was interviewed on a radio and soon afterwards, we saw a spike in complaints.

The more people know about the service, the more they will make use of it,” says Mkhawane.

Go to www.taxombud.gov.za or call 080 066 2837 to lodge a complaint with the tax ombud or email ssmo@sars.gov.za to reach the Sars Service Monitoring Office.

Bernard Ngoepe, Eric Mkhawane, news, Phumza Macanda, Pravin Gordhan, Small Business Connect, The DTI

[Dave A]

The process for VAT registration is going to be "improved", unfortunately only effective next year. I am given to understand that voluntary registrations will still have to jump through hoops, but mandatory registrations should be a lot simpler than under the current regime.

As part of the trade-off, there'll be no VAT refunds if your input VAT claimed happens to exceed your output VAT in any period (the area where all the fraud was happening, obviously). Instead, you will have to use the credit to offset against future returns.

[Justloadit]

As part of the trade-off, there'll be no VAT refunds if your input VAT claimed happens to exceed your output VAT in any period (the area where all the fraud was happening, obviously). Instead, you will have to use the credit to offset against future returns.

This is all good and well, but if you export most of your manufactured items, then the input VAT will always exceed the output VAT, which means you will never get your money back then, which may be my case in the future, which is my profit.

[Marq]

As part of the trade-off, there'll be no VAT refunds......

What trade off are you talking about?
They will make the application process much easier in return for not paying out legitimate claims? No trade off there.

So if you are not profitable, you are also penalised by SARS from a cashflow point of view.....thats assuming you will become profitable.

I always try and maintain a positive vat payment scenario to avoid any issues with the. At the beginning of the year had a situation that reduced the total payment to only R79. A bit down from my 'usual' payment. They invoked paragraph 6010 rule 3g of clause 6b subset c quad i) of some foreign tax law, which says...this guy is suspect having only paying us a small amount, how dare his business not make bucks like it usually does - therefore he is penalised and shall endure the wrath of many audits and questions and papers and phone calls to please explain this situation. And so it was that an extra months administration was involved with many high salaried individuals to explain why the R79 should not be R179.
So eventually I gave up and agreed to pay an extra R100 ( I kid you not it was about that) for having claimed an amount on an invoice which they felt was not in the production of income.

Through efiling, I followed their instructions on the phone on how to correct this situation. It seems afterwards that I did the adjustment in the wrong period - to fix the fix (with on the phone instruction and much frustration) has been a comedy of errors, along with penalties and interest for not having paid the full amount in the one period and letters of warnings for having overpaid in the next. I am still trying to correct this allocation problem. Seems as though I am incapable of following instruction and should be punished by the state.

Another scenario......I follow the efiling system which says:-

- fill in vat form, push the submit button which induces the payment form to popup which creates bucks out your bank. Simple right.....
Last year one of the periods did not happen properly because apparently per their expert on the phone, I pushed the manual submit button instead of the file your return button. This has created a situation of an unallocated payment and a return that still needs to be submitted.
So I asked - If one pushes the manual button, does the payment scenario happen automatically.
'No this cannot happen as the system would not know how much you must pay' - 'Ok' says I - 'then how did the automatic system take my bucks for the exact amount that the form said I must pay?"
They dont know - but what they do know is that I must write a letter - post office style, no email or efiling method - to their committee of ten to apologise for the error of my ways in not pushing the right button and creating all these problems and they will in turn look at and review the whole sorry state of affairs and perhaps reverse the penalties for not having submitted that months return.
I advocated that they had a payment and that it had not mattered whether the form had been manually submitted or which ever button had been pushed - the form had been saved on their system and seeing as everything was done by using their system they should be able to review their log and audit files and determine that a form had in fact been filed. Another ongoing outstanding problem created through efiling.

So lets talk about 'common sense' here....I dont think so - common sense = a basic knowledge of logic and simple mind activity.
Not likely to happen when it comes to sars. According to my records, I am up to date and have accounted to them for all. According to them, I am not up to date, have many outstanding issues and owe penalties and interest for having used their system correctly.

I sit here and think.. I am an accountant, I know this stuff, I know forms. I build websites and databases as well and yet somehow I have failed dismally to use what should be the easiest of all website systems to use. What is wrong with me? Then I realise....I am using the force of mind and logic to understand government and potential sycophantic drones, I should be using ....??.....gee I dont know what force one uses against such a thing.....dark magic comes to mind. Perhaps a course at Hogwarts will sort this out.

[wynn]

I am using the force of mind and logic to understand government and potential sycophantic drones, I should be using ....??.....gee I dont know what force one uses against such a thing.....dark magic comes to mind. Perhaps a course at Hogwarts will sort this out.

You call them 'Swivel Servants' because they sit on swivel chairs, and they run efficiently on KFC.
No KFC and they develop that 'Civil Servant Shuffle' you know the one where they heave a huge sigh and sort of waddle over the area from cabinet to printer as if they are walking barefoot of broken glass.

Supply KFC and you will get the finest service available.

[Marq]

KFC = Komrades Fuel Cell - right ... sort of gives you wings.