Sars wants taxpayer to grin and pay up for ghost account

A taxpayer is embroiled in a Kafkaesque bureaucratic nightmare with no way out of an auto-assessment by the South African Revenue Service (Sars), which has determined she owes some R8 000 tax on interest allegedly received from a deposit account she never held.

The taxpayer was auto-assessed by Sars and her income tax return was prepopulated with incorrect data from the Post Office indicating that she received interest of R23 720 from a ghost account with the Post Office.

Her name is being withheld due to taxpayer confidentiality requirements.

Auto-assessments are prepopulated with data received from external service providers such as employers, medical schemes, banks and retirement annuity funds, according to the tax number and ID number. Taxpayers can check if the data is correct and confirm the assessment. If the auto-assessment is incorrect, the taxpayer will be allowed to file a new return, making changes such as including additional information.

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But where the third-party data is incorrect, the taxpayer cannot change it or object to the assessment. They are required to contact the third-party data service provider and persuade it to send updated data to Sars.

The taxpayer now faces the seemingly impossible task of trying to contact the Post Office.

The Citizen wrote to Sars Media and posed various questions. It did not reply to them and referred us to a media statement issued in June which does not address incorrect third-party data.

One of the questions was to provide the details of a contact person at the Post Office who the taxpayer could approach. Sars was not prepared to assist in this regard. It was also asked to explain why it believed that data from the Post Office was undisputedly correct.

We tried to contact the Post Office customer services line, but no one picked up, and the number listed for the head office on the web is defunct. In any event, if one doesn’t have an account with the Post Office and therefore no account number, what is the point of reference?

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The Post Office appears to be in an insolvent state, evidenced by its liabilities exceeding its assets by R4 billion for the 2022- 2023 financial year. The external auditor, the auditor-general, issued a “disclaimer of opinion”, which means it could not form an opinion on the financial statements due to insufficient records or unreliable information.

The 2022 annual report states that: “The state of the IT infrastructure on branch and data centre level remains a serious risk to the organisation… This aged, unsupported infrastructure provides the hosting platform for all SA Post Office business applications. This entire landscape operates at risk with no support and maintenance contracts active due to lack of funding.”

The annual report also showed the Post Office operated under intolerable strategic risk levels. The “customer trust deficit and brand equity erosion impairment” including the “inability to maintain satisfactory customer service levels” and “operational failures and inefficiencies” levels were very high.

Beatrie Gouws, quality specialist: tax at BDO SA, noted that the Sars rule was that you had to go to the third party. “But let’s think about it. Who populated your return? If not you (it’s a self-assessment return), then you must be able to fix it.

“Currently, the fix can only be initiated by the third party. That makes it easier for Sars, but potentially harder for the taxpayer.”

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Gouws said where the taxpayer is the customer and the third-party information is incorrect, the appropriate approach is for the taxpayer to approach the third party to ensure data integrity.

Her suggested solution was that “Sars creates a workaround where the taxpayer indicates ‘no knowledge of this account’. The onus should be on the third party to investigate rather than for the taxpayer to chase them.”

Meanwhile, Sars maintains it’s the taxpayer’s problem and she has to pay the additional tax “due”.