Legal and Policy - 26 May 2022

SARS:

• 25 May 2022 – Media release – SARS remains operational despite strike

The South African Revenue Service (SARS) has noted that organized labour has opted to embark on an industrial action despite concerted efforts by SARS to avert the strike. SARS believes that its offer, to which it has received no response, is the best under the prevailing socio-economic challenges facing the country. SARS is also limited by the resources available to it from the funding grant.

SARS Commissioner Mr. Edward Kieswetter said, “I understand and empathise with the financial challenges faced by our own employees at SARS, as well as all employees country wide. In fact, all South Africans, especially millions who are unemployed, suffer the impact of the current economic climate. SARS is a microcosm of the broader society and the sentiment of discontent is understandable, especially when they have a sense that the current situation is unlikely to change in the short term. Employees do not willingly withhold their labour because that in itself has a financial impact on them under already tough times. One has to understand though, that when workers feel frustrated they feel that by going on strike is the last resort for them to be heard.”

The Commissioner continues: “SARS recognises the constitutional right of workers to strike and express themselves within the provisions of the law. The important work of SARS has to continue and we will take whatever steps necessary balance the impact of the strike with our responsibility to discharge the important responsibility of providing important services to taxpayers and collecting all tax revenues due. This very revenue pays the salaries of government employees and provides the necessary resources to provide public goods and services. The work of SARS is transformative and enables Government to build a capable that fosters sustainable economic growth and social development in the interest and well-being of all South Africans.”

SARS wishes to report that the first day of the strike proceeded orderly, without incident, and thank employees for exercising their rights, whilst respecting the rights of others and observing the law. Due to the wide range of on line services, disruption to the operations was minimal. Over the next few days, we will continue to monitor developments at our branch offices. Our website will continually be updated to advise the public on how to engage with SARS to fulfil their required obligations.

Taxpayers are encouraged to avoid coming to a SARS office.

Customs operations at ports of entry, especially borders, have been without major interruptions. All Customs border posts are operational with the contingencies in place mitigating the impact of the industrial action. SARS Customs will continue to rely on the support of other Government agencies across all border posts, especially from the South African Police to ensure that there is continued operation.

SARS has explained to employees that the principle of “no work, no pay” applies. It therefore urges union leadership to give a formal response to its latest offer in order to settle this labour matter, which is to no one’s benefit. “I call on the leadership of labour”, continues Commissioner Kieswetter, “to consider our proposal. I assure you that it is the best we can do under the current funding constraints. SARS simply do not have the resources to meet the labour demand of CPI plus 7%. I understand that our offer is not what our employees want, but it holds the real possibility of resolving the current industrial action at a time where employees in the entire public service are affected”

He concluded, “We realise that over the past few years’ remuneration and benefits has not kept up with inflation. In a country that is faced with high unemployment and other socio-economic challenges, SARS employees already have security of tenure, as well as market related salaries and benefits. This offer, whilst not addressing the demands of employees, will provide additional relief to minimise the impact of the current economic conditions. The doors of negotiations remain open and we are ready to work with our colleagues in labour to look at ways to improve the overall value proposition to our employees.”

SARS appeals to labour to remain peaceful in their protest and to respect picketing rules as specified in the CCMA Picketing Rules issued.

For further information, please contact SARSMedia@sars.gov.za

• 25 May 2022 – RFP50/2021: Provision of Fleet Management Services for a period of five (5) years.

Questions and answers part two

• 25 May 2022 – The SARS strike impact on Customs will be updated daily at 8:00, 12:00 and 17:00, keep an eye on the Customs & Excise landing page.
• 25 May 2022 – RFP51/2021: Appointment of a service provider for the marketing and advertising services.

A non-compulsory virtual briefing session will be held on 01 June 2022 at 09:30 – 11:00. Interested parties must click on the link to join the session. Click here to join the meeting.

Service Level Agreement will be uploaded to the tender pack before 01 June 2022.

• 25 May 2022 @ 9:30 am – Kindly note that the following operations are affected until further notice by the SARS strike. Virtual appointments made will still be honoured.

Branches closed:

• Port Elizabeth

• Umtata

• Pinetown

• Bethlehem

• Ashlea Gardens

• Giyani

• Witbank

• Nelspruit

• Standerton

• East London

• Boksburg

• Upington

• Rustenburg

• Lebowakgomo

Contact Centre is open to take calls in the following queues only:

• PAYE

• VAT

• Personal Income Tax

• Customs

• 24 May 2022 – This serves to inform you that SARS and its recognised trade unions, i.e. National Education Health and Allied Workers Union (NEHAWU) and the Public Servants Association of South Africa (PSA), are in dispute on its 2022/23 wage negotiations process. The high impact for traders and travellers will likely be felt at the following ports, see the detail in the letter to Trade.
• 24 May 2022 – Income Tax Act, 1962

Table 3 – Rates at Which Interest-free or Low Interest Loans are Subject to Income Tax

• 24 May 2022 – Income Tax Act, 1962

BCR 079 – Cancellation of Share Exchange

• 24 May 2022 – Binding Private Rulings (BPRs)

BPR 374 – Determination of Group of Companies

BPR 373 – STT Treatment of the Proposed Transfer of Listed Shares to the Applicant in order to Hedge its Exposure under Over-the-Counter Derivative Transactions

• 24 May 2022 – Customs Weekly List of Unentered Goods

• 24 May 2022 – SARS received reports about phishing attempts that indicate tax payments should be made to blockchain wallets. The notification is purporting to be from SARS, please ignore and do not click on any links. See an example of this blockchain scam here. For the latest scams, keep an eye on our Scams & Phishing webpage and report new scams to phishing@sars.gov.za.
• 23 May 2022 – SARS is inviting all Small, Medium and Micro Enterprises (SMMEs) taxpayers and traders to a webinar on Thursday, 26 May 2022, from 17:00 – 19:00. The following Pay-As-You-Earn (PAYE) topics will be covered:

• Registration requirements

• Completion of returns

• Accurate and timeous filing

• Reconciliations

• Payment processes

• Employment Tax Incentive (ETI)

• Deregistration.

Date: Thursday, 26 May 2022
Time: 17:00 – 19:00
YouTube link: https://youtu.be/hm5SHbyEYzM

• 22 May 2022- The leadership of South African Revenue Service (SARS) met with the Organised Labour represented by the National Education Health and Allied Workers Union (NEHAWU) and Public Servants Association of South Africa (PSA) to find resolution to the matters on which the unions declared a dispute.

We had shared the leadership of the two trade unions that their current demands for a CPI + 7% is simply not affordable.

Like all Government institutions, SARS is affected by the financial challenges facing the country, and as a result, in SARS’ funding allocation from National Treasury, no provision was made for salary increases. Through its own diligence in managing costs, and other initiatives, SARS is therefore able to make some funds available towards Bargaining Unit employees.

These funds are from some savings from last year (2021/22) as well as projected savings from this current year (2022/23) which has been approved towards people costs. Commissioner Kieswetter said: “I am pleased that under difficult conditions we are able to provide some financial relief to our employees. I also remind our employees that we are inordinately privileged to have employment security at a time when so many are unemployed and financially destitute.”

Following a special National Bargaining Forum convened on Saturday, 21 May 2022, the unions where informed of the Employer’s proposal and subsequently started engaging SARS on various options to allocate the available funding towards financial relief for employees, and in an attempt to resolve the dispute.

SARS has formally extended this offer to Organised Labour on Sunday, 22 May 2022, in full and final settlement of the dispute relating to the salary increase demand of the 2022/23 Substantive Wage Negotiations, on a without prejudice basis. The unions will engage their members to obtain a mandate, after which the parties will meet again to continue engagements.

SARS has further committed to continue discussions on a number of non-monetary items shared between the parties, to review and improve the overall employee value proposition. This process already commenced around the middle of last year.

SARS leadership is pleased that engagement between the parties on the wage dispute has been revived, and remains constructive and positive. We remain confident that with this offer, we can resolve the current dispute and move forward to focus on serving taxpayers and executing the important mandate we serve.

• 20 May 2022 – RFP50/2021: Provision of Fleet Management Services for a Period of Five (5) Years. Questions and answers part one is now available.
• 20 May 2022 – Publication details for tariff amendment notice R2093, as published in Government Gazette 46380 on 20 May 2022, are now available
• 19 May 2022 – The tariff amendment notice, scheduled for publication in the Government Gazette, relates to the amendments to –

• Part 2 of Schedule No. 5, by the insertion of refund item 522.02/22.00/01.04 and Note 7, to provide for a refund item for certain alcoholic beverages that have undergone post-manufacturing deterioration (Expired Stock) (with retrospective effect from 15 March 2019).

Publication details will be made available later

• 19 May 2022 – Tax Administration Act, 2011, and Income Tax Act, 1962

SARSTC 35448 (ADM) [2022] ZATC DBN (16 March 2022)

Tax administration; income tax: (a) Whether management fees claimed by Taxpayer Z in the sum of R16 million, made up of management fees excluding value-added tax are expressed in the financial accounts of Taxpayer Z as “management fees”. (b) Whether SARS was entitled to impose interest under Act 58 of 1962, and whether SARS should have remitted that interest. (c) Whether SARS was entitled to impose an understatement penalty of 125% under Act 28 of 2011. (d) Whether Taxpayer Z or SARS should pay the costs of the appeal.

• 19 May 2022 – An updated version of e@syFile was released. The changes include adjustment to EMP501 submission files to align validation for Tax Directive numbers with the SARS PAYE BRS and adjustment to the PDF rendering to allow Operating System (OS) default application. For the latest version 7.2.6 (including 7.2.5), see the e@syFile webpage.
• 18 May 2022 – Income Tax Act, 1962: Tables of Interest Rates

• Table 1 – Interest rates on outstanding taxes and interest rates payable on certain refunds of tax
• Table 2 – Interest rates payable on credit amounts

NATIONAL TREASURY:

• Media statement: Response to the rating action of S&P Global Ratings – 20 May 2022

OECD:

• China deposits an instrument for the approval of the Multilateral BEPS Convention - 25 May 2022

• Public comments received on the regulated financial services exclusion under Amount A of Pillar One – 25 May 2022
• Labour taxation rebounding as global economy recovers from COVID-19 pandemic - 24 May 2022
• Public consultation meeting on the Crypto-Asset Reporting Framework and Amendments to the CRS - 23 May 2022

SAFLII:

• Commissioner for the South African Revenue Services v Louis Pasteur Investments (Pty) Ltd and Others (Mia Intervening) (12194/2017) [2022] ZAGPPHC 321 (23 May 2022