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#MTBPS2018: SARS withheld tax refunds under former Commissioner Moyane, these are the consequences…

PUBLISHED: Wed, 24 Oct 2018 14:14:32 GMT

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By Monique Vanek

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The Medium Term Budget Policy Statement (MTBPS) has confirmed that the South African Revenue Service (SARS) under its former Commissioner Tom Moyane delayed paying tax refunds, which is now hurting revenue.

According to its current Commissioner Mark Kingon, whether this was intentional or not is up for debate but he believes it was not intentional.

Kingon in a closed media briefing said SARS is currently evaluating why refund payments slowed.

The MTBPS points a negative picture of what happened to tax revenues under Moyane’s tenure and the aftermath: “A backlog of VAT refunds at SARS, and an underestimation of refunds due, has led to an overly optimistic view of revenue growth. Net VAT collections account for about R20 billion of the in-year revenue shortfall. Two factors account for the revision in net VAT. The VAT refund estimate has been revised upwards by R9 billion, and about R11 billion will be paid out to clear the backlog in the VAT credit book (see table).