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  • Home »
  • Questions »
  • Questions asked to the Minister of Finance

2022-w58 - 25 February 2022

  • ← 2022-w42 - 25 February 2022
  • 2022-w156 - 25 February 2022 →
  • Picture of Ashor Sarupen
    Sarupen, Mr AN question
    (1)Whether any value-added Tax (VAT) refunds are overdue for payment; if not, what is the position in this regard; if so, what is the total outstanding amount per economic sector; (2) whether any steps will be taken to resolve any backlog in the payment of overdue VAT refunds; if not, why not; if so, what are the relevant details?
    Source Link in context Link
  • Minister of Finance answer

    (1) The South African Revenue Service, in processing all refunds, will always seek to balance the protection of the fiscus from illegitimate refund claims and the optimal processing of all refunds that are legitimate. This balance is further enhanced when considering that more than R50bn in illegitimate refunds are prevented from flowing out of the fiscus every year.

    SARS has for the period ending 31 December 2021 paid R193bn in refunds and 72% (R138bn) was paid within 21 days, furthermore it is worth noting that almost 80% of all refunds claims are paid without audit or verification interventions thus confirming our compliance theory that most taxpayers are honest that want to meet their tax obligations fully. The remaining 20% is the combination of taxpayers who make genuine errors as well as those who unfortunately seek to defraud the fiscus. It must be noted that the law does not prescribe a minimum period for the completion of an audit or verification process, therefore rendering the notion of overdue refunds a misnomer in law however SARS has committed to turnaround times in its service charter in line with the SARS desire to provide superior service to taxpayers in order to bring about clarity and certainty on their affairs

     

    Yes, SARS has some refunds that are outstanding. SARS at any given time will have amounts outstanding on refunds for a number of reasons, key amongst these reasons are 1) SARS is at various stages of the audit and verification process and 2) Taxpayer related issues including invalid banking details, instances of outstanding documentation where SARS has communicated in more than one instance with the taxpayer requesting such supporting documentation (these are continuous non-compliance cases) as well as instances of suspected fraud by the taxpayer. The sectorial view of the balance of refunds in audit in excess of 21 days is as follows:

    Industry

    Vendors

    Sum of Balance

    AGENCIES AND OTHER SERVICES

    11718

    -R 3,485,040,995.02

    AGRICULTURE, FORESTRY AND FISHING

    11228

    -R 2,032,265,989.44

    BRICKS, CERAMICS, GLASS, CEMENT AND SIMILAR PRODUCTS

    338

    -R 52,091,107.65

    CATERING AND ACCOMMODATION

    1827

    -R 302,765,982.13

    CHEMICALS AND CHEMICAL, RUBBER AND PLASTIC PRODUCTS

    707

    -R 362,900,673.78

    CLOTHING AND FOOTWEAR

    520

    -R 67,148,930.30

    COAL AND PETROLEUM PRODUCTS

    555

    -R 216,979,759.08

    CONSTRUCTION

    10316

    -R 4,273,709,791.85

    EDUCATIONAL SERVICES

    471

    -R 81,063,823.27

    ELECTRICITY, GAS AND WATER

    583

    -R 261,615,811.24

    FINANCING, INSURANCE, REAL ESTATE AND BUSINESS SERVICES

    13678

    -R 4,327,781,607.92

    FOOD, DRINK AND TOBACCO

    1630

    -R 248,802,796.42

    LEATHER, LEATHER GOODS + FUR(EXCLUDING FOOTWEAR + AND CLOTHING)

    205

    -R 20,001,623.97

    MACHINERY AND RELATED ITEMS

    1243

    -R 304,557,104.71

    MEDICAL, DENTAL AND OTHER HEALTH AND VETERINARY SERVICES

    774

    -R 218,844,178.05

    METAL

    437

    -R 275,891,258.63

    METAL PRODUCTS (EXCEPT MACHINERY AND EQUIPMENT)

    529

    -R 108,858,944.81

    MINING AND QUARRYING

    3990

    -R 934,174,989.83

    OTHER MANUFACTURING INDUSTRIES

    719

    -R 183,565,764.57

    PAPER, PRINTING AND PUBLISHING

    571

    -R 98,998,679.73

    PERSONAL AND HOUSEHOLD SERVICES

    509

    -R 177,524,560.34

    PUBLIC ADMINISTRATION

    236

    -R 264,314,018.60

    RECREATIONAL AND CULTURAL SERVICES

    561

    -R 75,341,201.10

    RESEARCH AND SCIENTIFIC INSTITUTES

    145

    -R 24,340,885.13

    RETAIL TRADE

    4491

    -R 707,260,203.27

    SCIENTIFIC, OPTICAL AND SIMILAR EQUIPMENT

    149

    -R 60,521,555.14

    SOCIAL + RELATED COMMUNITY SERVICES NOT ELSEWHERE SPECIFIED

    785

    -R 95,335,672.15

    SPECIALISED REPAIR SERVICES

    599

    -R 94,216,037.19

    TEXTILES

    300

    -R 62,412,722.77

    TRANSPORT EQUIPMENT(EXCEPT VEHICLES, PARTS AND ACCESSORIES)

    756

    -R 338,988,730.81

    TRANSPORT, STORAGE AND COMMUNICATION

    3059

    -R 757,966,821.77

    VEHICLES, PARTS AND ACCESSORIES

    1236

    -R 240,996,838.88

    WHOLESALE TRADE

    3695

    -R 1,740,906,434.94

    WOOD, WOOD PRODUCTS AND FURNITURE

    412

    -R 46,556,690.16

    Grand Total

    78972

    -R 22,543,742,184.65

    The financing, insurance, real estate and business services accounts for the largest balance, followed by Agencies and other services, Wholesale Trade then Construction sector.

    (2) SARS adopts a number of strategies to address the credit book backlog including but not limited to working overtime, repurposing of experienced staff to focus on audits and verifications, applying secondary risk tolerance and appetite based on taxpayer previous compliance track record and continued attempts to get taxpayers to comply with outstanding requirements in order to process refunds. SARS accepts that the balance of supply and demand is not always possible to maintain thereby leading to increase in inventory faster than the available capacity can handle. In this regard refinement of our risk approach is on-going.

    Source Link in context Link
  • ← 2022-w42 - 25 February 2022
  • 2022-w156 - 25 February 2022 →

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