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All right, 21 minutes past seven o'clock here on Power Business, our Monday edition of the show, and let's turn our focus to this now. Can SARS come after your bank account for outstanding tax debt? Well, yes, the South African Revenue Service has the legal authority to recover unpaid taxes directly from bank accounts, but why? So joining us on the line to discuss this conversation on the revenue collector's powers,
Taxpayers' options in how to stay compliant is Gabelomutrasi, a head of accounting and tax debt at Latita Africa. Gabelom, very good evening and welcome to Power Business. Good evening, everyone. Thank you for having me this evening. I guess take us through the circumstances then where SARS-CAD deduct funds from a taxpayers bank account without their authorization and sort of what under circumstances does this typically happen.
I think it's important to understand that SARS is actually empowered in terms of Section 179 of the Tax Administration Act. And this empowerment actually gives SARS the power to give notice to any person that might hold or owe money to the taxpayer the most commonly would be your employer, a pension fund or bank. So circumstances basically that would ignite for SARS to actually collect money through a third-party appointment.
They would initially issue out the final demand notice to the text there, notifying them that they have outstanding debt and give them various mechanisms as to how they can set up their debt with SARS. And the text there that failed to come forward, SARS is actually empowered to use their powers in terms of Section 179 to collect on these outstanding debts, and that may include accessing your bank account and deducting these amounts.
Are there any sort of amounts then? Is there like a minimum amount threshold where they say, OK, you owe this amount and you haven't made any sort of payment arrangement with us. So we're coming after your money from your bank account. The mandate would be for that will be given to the third party in such case. Would that would be that a certain taxpayer or the certain amount we need to collect that amount? Should the funds be available in the taxpayer account?
then those funds would unfortunately be deterred in full. But talk just then about what steps should taxpayers take then if they are unable to pay their tax debt in full and how does then the tax compromise, how does the tax compromise the process will rather list us to focus in the beginning then. Talk just about what steps then should taxpayers take if they're unable to pay their sort of tax debt in full.
Taxpayers do have alternatives that SARS actually provides to them, one being such a deferral of payment arrangement. This is where the Taxpayer would actually get into an arrangement of SARS to repay that debt over a certain period of time in installments on a monthly basis. And the other would be the one that you mentioned, which would be a compromise, which is a more complex kind of mechanism where the Taxpayer would request from SARS to get a
deduction on the total debt that is outstanding and actually pay over a certain amount and not settle the entire debt. What are the eligibility criteria then for a tax compromise? And talk to me about what kind of financial information does SARS typically require from taxpayers seeking relief? Basically, there wouldn't be an outset criteria for that compromise because of which case would be evaluated on its own merit.
However, since this is an extensive request, SARS would actually request for extensive financial records. These would include your latest financial, your latest financial and no financial statements, your latest management accounts, your debtors, and creditors analysis and schedules of assets that you may have disposed over the past 36 months. And for businesses, they would go to an extent to request for their direct income and expenditure statements, as well as their assets and liabilities.
in a case where SARS-D is super soon personal liabilities from the directors. And then for taxpayers then who do not qualify for compromise, what options are available to them in terms of structured payment plans or deferral arrangements? All right. Depending on the level of the, in fact, the stage of the debt, if it is a debt with a taxpayer through a review of the assessments that have been made, the taxpayer can actually dispute the assessment
up until the peer stage where they can reach certain agreements of SARS if the financial resources are not sufficient to actually settle the entire amount and also it would have an impact on the future financial sustainability of the company if SARS had to pursue the entire debt. And another alternative would be, again, to getting to defer payment arrangements. That's where they actually pay off the installment over a set period of time as a group of SARS.
All right, we are in conversation now with Gabello Mudlasi, ahead of Accounting and Tax Debt at Latita Africa, talking to us about the circumstances where SARS can deduct money from your bank account. And of course, you can call in on 0861987000. And that's the number that Fano from Johannesburg used to dial in this evening. Fano, a very good evening. And welcome to the program. You have a question for our expert this evening.
Hi, how are you? I'm fantastic in you. All right. You can shoot your question. So I don't really have a question. I just have a bit of an experience that I'm going to go into in our little situation with South where they are one of the people who they directed money from. And the shocking thing was in my case, I did not receive any notice prior to this. There was no final letter of demand or anything sent to me. I do know that there were there were issues in terms of my
You know, my sub-siling the issues in terms of not, it's been captured properly online and all of that and there were penalties involved, right? So I was throwing the process of wanting to dispute that and I already booked a working appointment. As you know, the waiting list is quite long, so you probably wait for about a month or so. And just a week before I was due to go into the sub-branch, I found out that they actually did the direct money from my account.
And not only that they went into my capy-tech account, which is not even my main account, but they went into my capy-tech account and accessed my savings. And they decided about 5,000 wins. That was on the 35th of December. So you can imagine how, yeah, how big that was. But that is my experience right now.
You can listen then on the radio, then Gabelo can sort of address in those concerns. Gabelo saw us withdrawing around 5,000 from her account without prior notice. What are the next steps? I think from what I could depict is that one of the biggest problems that most taxpayers would actually face is that
they have not updated their records with SARS. And in this, you'd find that a notice is sent to call us, in fact, correspondence gets sent from SARS to email that are no longer accessible by the text there. So in SARS' view, they've actually discharged their owners of carrying out the necessary notification to clients. But in instances where the text clarifies themselves well updated with their records of SARS and they didn't receive such notice,
they are able to lodge a complaint with the ombudsman to actually query that the action by SART invalid because of SART is actually mandated in subsection five of the section one, seven, nine of the TAA to ensure that the deduction from once or the appointment rather
of a third party to actually withdraw money is done after a final demand has been delivered to the client and there has been various case those way starts by the by the high court where stars was actually ordered to refund the taxpayer whatever amount that has been deducted because of started not follow the correct processes.
Yeah, and I suppose in the instance of the taxpayer, a lot of concern if you have money, especially in the case of fund or money deducted in December at a time when a lot of people will be trying to access their funds and they don't have the funds that they expected to have in their bank account.
Yes, and it's very unfortunate because of now SARS does not even target the only main account that you have. They go for any other account that has been registered with the third party, and if they are funds, the third party is appointed to actually say, start as a need of collecting their debt, and it should be paid as such. And in an instance, where a third party cannot actually collect the money, they need to provide expensive reasoning as to why they are unable to fulfill that mandate that has been given to them by SARS.
All right, we've got one more caller, Karl from Alberton. Gabello, if you can just stay on the line for us. Karl, very good evening and shoot your question. Yeah, evening. These audits, you can't hold people to ransom because of an audit. And you are also deducting from a gun issue order from the employee. And it takes more than three months to get an audit. It's long. It's just ridiculous and it's unfair.
because those fees, they attract interest. So they need to either come up with a solution around the audit. Once an audit has been put in place, they need to stop everything. Like, don't send anyone anything until the audit is done. Every week or every two weeks, they are sent under audit, under audit. And it's just ridiculous. What must the person do? I'm waiting for an audit.
So you cannot just be sending a reminder. Do the audit and tell me what the audit says. Okay. Thanks, Karl. You can stay on the line to hear Gabrielle's response. Camilla, I'm not sure if I understood Karl completely talking about audits and garnishing audits, but your reflections or your response?
The circumstances that we've come across is that SARS at times would issue a jeopardy assessment. And then a jeopardy assessment basically would say, we are based on the information that is available to us before you could actually give us additional information. We are assessing you based on the information that is at our disposal and the determined taxes that are outstanding would be this amount. And taxpayers, whenever they are in a situation where they need to dispute such assessments that have been raised by SARS,
They need to ensure that they follow a procedure which is referred to as a suspension of payment. And they need to provide reasons and marriages to their case so that when reviewed, the SARS official can take a decision to whether to suspend the payment and once payment is suspended, then there won't be any collection steps that would be followed by SARS.
So it's very vital that in a moment where you are in a disagreement with an assessment by SARS or SARS has placed you under audit or for an assessment that they've already raised that has actually created that on your account. It would be vital for them to ensure that they make use of that option to suspect to request SARS to suspend that payment. And in that way, SARS will not actually
send out demand letters for collection because of now that they do be suspended pending the outcomes of the dispute. All right. Thanks for the clarity around the assessment and the audit. I totally get you now. But we're going to have to leave it there. We've run out of time, but thank you so much Gabelor for your insights. Really appreciate you staying on a bit longer just to help us there with our callers. It's all a pleasure. Thank you so much for having me.
All right, that was Gabe Lomudrasi. The head of accounting and tax debt at Latita Africa, taking us through that or answering those questions around Kinsar's really come after your bank account.