Tax Ombud says unlawful practice discovered at Sars

Retired Judge Robert Nugent has been tasked with investigating tax administration and governance at Sars under the leadership of suspended commissioner Tom Moyane.

Picture: Sars

PRETORIA - The office of the Tax Ombudsman says it discovered unlawful practice at the South African Revenue Service (Sars) where problems were arbitrarily raised on taxpayers returns in order to delay paying a tax refund.

This was among the submissions at the Nugent Commission of Inquiry in Pretoria.

Retired Judge Robert Nugent has been tasked with investigating tax administration and governance at Sars under the leadership of suspended commissioner Tom Moyane.

Tax Ombud chief executive Eric Mkhawane says they identified the unlawful practice and raised it with Sars management.

“The practice of raising assessments to clear credits is of grave concern and that’s what we were concerned about. And we expected Sars to respond to this concern that we raised, unfortunately, Sars never responded.”

Mkhawane explains the effect this had on Sars’ books.

“Once you do a journal entry and the credit that was there is cleared, it may be counted as production. So that means instead of paying R100,000 in a refund, you claim you collected R100,000.”

The hearings resume next Wednesday.

(Edited by Thapelo Lekabe)