Marianne Merten
It is 9am at the tax court in Bellville, northern Cape Town, and the summonsed tax delinquents are sitting on the court benches – many looking sheepish that they have been caught.
Andre Minnie requests a postponement to try get his “IRP5” form from Port Elizabeth. Peter Laque explains he needs time to obtain proof that the 1999 tax return for his closed corporation is complete.
There are those like Sandra Collins, who admits to not having filed her income tax return. Although she wanted to arrange to pay off the admission of guilt fine as she has fallen on hard times, her case was postponed for trial.
Courtroom G in the new R11-million wing at the Bellville Magistrate’s Court is the third tax court in the country. Similar courts have been in operation in Pretoria and Johannesburg since late last year.
The Bellville magistrate has already handed down criminal convictions ranging from fines of R800 or 60 days imprisonment to fines of R1500 or 90 days in jail. An average of 30 summonses are issued each day.
The process is simple. Summonses are served on those who have failed to submit income tax returns, pay over VAT or give additional information as requested by the tax collector.
The offender has two weeks to prepare his or her returns, show the court proof that outstanding returns have been submitted and pay an admission of guilt fine starting at R300 on each count for first offenders. The statutory maximum fine is R2E000 for income tax-related charges and R4E000 for VAT offences, and/or a year in jail.
Bellville tax prosecutor Khalied Booley, a law graduate who has worked for the South African Revenue Service (SARS) for three years, has heard every excuse in the book. But once the process is explained to offenders, most rush to pay admission of guilt fines to avoid a criminal record. Only a minority of cases go to trial.
Ideally the taxman wants everyone to file returns and pay up on time. But tax morality among South Africans leaves much to be desired. “It [the tax court] is one way to show we not only have teeth, but we can also use the teeth,” says SARS national representative Fanie Zulu.
To increase compliance, the SARS also conducts tax education and offers customer services like the taxpayers’ centres in Bloemfontein and Pretoria, or the soon to be introduced Internet VAT returns. Over the past three years, an additional R15- billion has been collected.
Tax offences are generally regarded as lesser evils compared to the murder, rape and robbery cases on the criminal court roll, and are frequently postponed for months. At the tax court offences are finalised with an average of only one postponement.
SARS Western and Northern Cape regional law manager David Lombaard says the tax court has cut down the backlog of cases and is relieving the pressure in the justice system. Tax prosecutors are seconded from the SARS, and officials from local receiver of revenue offices prepare the summonses. Another spin-off is the increased public awareness about tax.
When 90 people were arrested in the Western Cape for failing to heed tax court summonses in March, Lombaard says the response from other defaulters was overwhelming. “People from little dorpies called up asking where to pay up,” he says.
ENDS