SARS targets employee tax dodge
Tax analysts are warning that companies passing off private employee expenses as legitimate business expenditure to reduce tax liability are attracting the attention of the SA Revenue Service and risk severe tax penalties.
A Business Day report quotes Corrie Tromp, a senor tax consultant at Ernst & Young, as saying that SARS was aware of this scheme and was moving to clamp down on it. Tromp said: Penalties of up to 200% additional tax and a maximum of 10% plus interest on the late payment of tax will be levied. Individuals responsible for implementing the scheme and participating employees may be charged. If convicted they faces fines or imprisonment, said Tromp. While tax structuring was necessary to ensure that any individual or business did not pay more that its dues to the tax authorities, it was also necessary to operate within the law to avoid liability to prosecution, she said. Full Business Day report