The South African Revenue Services (Sars) said over the past few years it has experienced an “unacceptable increase” in the non-submission of returns across all tax types.
Sars has now pledged to take action against these non-compliant taxpayers through an initiative with the National Prosecuting Authority (NPA) to take criminal proceedings against the worst offenders.
The initiative follows South Africa’s president Cyril Ramaphosa suspending Sars commissioner Tom Moyane in March after he refused to resign from the position.
As of March 2018, Sars said its outstanding returns books show that active taxpayers had collectively failed to submit more than 30 million returns, in many cases showing that multiple outstanding returns were due by a single taxpayer.
The initiative saw its first conviction last week when a representative of a company called SPS Distributors, referred to as S Ragunat, paid an admission of guilt fine of ZAR5,600 (£330, €379, $468) for non-submission of more than 50 outstanding value-added tax (VAT), pay-as-you-earn, (PAYE) and corporate income tax (CIT) returns.
“He was ordered to and has submitted all the outstanding returns,” a Sars spokesperson said.
Sars said eight outstanding return cases that involve hundreds of outstanding returns are currently before the courts.
Despite Sars ramping up its efforts to enforce tax compliance, it said criminal prosecution was still a last resort.
“All the taxpayers that will appear in court were engaged beforehand and final demands were issued them before the criminal cases commenced. At this stage, 36 dockets have been handed over to the NPA,” the Sars spokesperson said.