In an attempt to resolve ongoing statement of account errors in some of the country’s biggest companies, the South African Payroll Association (SAPA) is set to meet with the South African Revenue Services (SARS) acting head Mark Kingon later this month.
SAPA board chairperson Arlene Leggat explains that when large organisations submit their EMP201 to SARS, it indicates how much it has deducted from their employees’ pay for tax purposes. The deductions would subsequently be paid over to SARS, clearing an organisation’s account with the revenue collector.
“The problem is that SARS compiles all this information into journals. There are no particular reasons for these journals and no-one in SARS can explain what they are for. The figures that are journalised are invariably not related to any payment or EMP201 on the account,” Leggat notes.
She further explains that these journals often result in an accounting error, and subsequently an underpayment reflecting on a particular company’s statement of account. “Although this might not seem like a significant issue, it can lead to further damage to the country’s economy,” Leggat warns.
If an organisation reflects an under-payment at SARS, they are deemed non-tax compliant, and therefore cannot receive tax clearance from the agency. “If a company does not carry tax clearance, it cannot do business – it really is that simple. This issue is affecting the ability of organisations to function, grow and create those jobs we so desperately need. Surely, this is something we really need to fix. It is stemming from utter incompetence within SARS.”
Although Leggat cannot give an absolute answer as to how many companies are being affected by erroneous statement of accounts, she states that it is a large majority of the country’s biggest companies, including construction companies and a hospitality groups.
Through its meeting with Kingon, SAPA says it would aim to set a committed team or point of contact in place at SARS, who will deal with any statement of account issues that may arise. “We will be highlighting the issues received from our members and requesting resolution from SARS,” says Leggat.
Further, SAPA is seeking commitment from SARS to resolve these long-standing issues.
“We would like to have a process from SARS in how to approach all of these issues – something that is clearly defined and has an expected time-frame and outcome. This will give SAPA and the employers a means to query and escalate unresolved issues within a certain time-frame, instead of continually being fobbed off.”
Taking it to the next level
Leggat points out that if no resolve is made through the meeting with Kingon, SAPA will have no choice but to take the matter further. “If a company has tried to resolve its issues with SARS, but it has proof, case numbers, and correspondence; then it is time to go to the Tax Ombud who will further assist in obtaining final resolution,” she says.
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