This article was published online on SAICA’s website: www.saica.co.za
Johannesburg, Tuesday 26 July – Strange as it may seem, some people have been receiving phone calls from private debt collecting companies urging them to pay their taxes. It seems like a hoax, until the person on the other side of the line mentions your tax number, which particular tax returns are due, and even how much tax is owed to the South African Revenue Service (SARS).
If you were therefore wondering whether SARS has outsourced some of its debt collecting activities to some players in the private sector, the simple answer is yes.
How and when did this happen?
On 22 September 2015, SARS presented its Strategic and Annual Performance Plans to the National Council of Provinces Finance Committee. During this presentation,, it was mentioned that tax to the tune of R97 billion was due to the State, and that a special project was underway to recover these funds. The minutes of that meeting recorded that collection of some of the debt would be outsourced to debt collection agencies.
A Request for Proposal (RFP) was then published on 9 October 2015 to solicit tender proposals. The RFP stresses that SARS will only outsource the collection of debt older than four years (for a total of R15 billion). It adds that ‘from time to time SARS will also embark on outsourcing certain categories of debt to the pre-approved debt collection agencies on its panel’. In other words, the success of this endeavour may encourage SARS gradually to outsource the recovery of a greater portion of the overall debt.
The successful bidders are appointed for an initial period of 36 months, which could later be extended by an additional 12 months. Thirty-nine companies applied for the current tender, and three were successful: Credit Solutions, NDS Credit Management and Lekgotla Trifecta Capital Consortium.
The RFP indicates that these agencies must adhere to the following process when engaging with a person owing SARS:
- Issue a notification to the debtor to inform them that their account has been handed over. The notification will state the amount owed and outstanding returns.
- Allocate the cases to its call centre and start to engage the tax debtor(s).
The agencies must also provide SARS with a monthly report containing, among other, information about the taxpayers contacted by letter and phone call, payments made by these taxpayers, payment promises or arrangements, and returns promised to be submitted. The report must also list those taxpayers still on the list who are found to be deceased, as well as those who are unable to pay because they untraceable, or have been liquidated or sequestrated.
SARS has availed its taxpayer database to the agencies in order to allow them adequately to perform their mandated required functions. Importantly, the debt collectors were required to sign an oath of secrecy, where they had to declare not to disclose taxpayer information to any non-SARS officials. They also agreed to potential criminal prosecution should they violate this clause. This strict condition should give taxpayers some degree of peace of mind.
What does this mean for you?
If your tax debt is older than four years, expect a call from one of these agencies (if you have not received one already). This also implies that people should make a concerted effort to pay their taxes as soon as possible, even if their debt to SARS dates back less than four years.
It is also important to be aware of potential scammers who may try to use the good intentions of SARS for their own nefarious purposes. Those who receive notifications from persons claiming to be from the above-mentioned agencies are encouraged not to volunteer private information to the caller, but to require that the caller first provide the information that they have about you. A good idea would be to refer the caller to your CA(SA) tax advisor, who will take it from there.
For your own protection, you should also log onto your eFiling profile to verify that you really do owe the amount alleged by the caller.
Whatever you do, do not make any payments to a bank account provided by the caller. Pay into the same SARS account that you have been paying into over the years, even if the caller insists that the banking details they have mentioned belong to SARS.