Over the last few weeks, our helpdesk has received an alarming number of queries from taxpayers asking what they can do as their refunds are being held back by SARS due to a special stopper being placed on their account. It’s a complex situation and the only advice we've been able to provide has been for the individual to make contact with SARS directly to try resolve the matter.
The South African Institute of Tax Professionals (SAIT) issued a statement on Tuesday 20 September 2016 advising that they’re looking into the issue after numerous complaints had been raised. The complaints are coming from not only individual taxpayers, but from tax practitioners and their controlling bodies too.
Initial investigations reveal that the primary reason for Special Stoppers being applied is because the personal details of the taxpayer haven’t been verified on the SARS system. Most often these are physical address or bank account details.
Taxpayers Are Frustrated With SARS' Special Stoppers
In most cases, these taxpayers have paid tax practitioners to assist them to file their returns and as such can avoid having to visit a SARS branch personally. Details that have been accepted by SARS in previous years and refunds processed seamlessly are now being requested to be verified – which entails a visit to their local SARS branch - at one of the busiest periods for the organisation!
Another point of contention is conflicting communication being received from SARS. In some cases, complainants have first received automated assessments of their tax returns stating that no verification is needed, only to receive a letter 24 hours later with the request for verification. This leaves taxpayers confused and even more frustrated when reaching out to SARS call centre agents who aren’t able to assist with removal of the Special Stoppers.
SARS have explained that while they’re implementing as many mechanisms as possible to alleviate stress that taxpayers face when submitting their annual tax returns, the Special Stoppers exist because of a high fraud risk and are implemented to protect taxpayers from fraud or abuse of their tax account.
But the affected taxpayers are left at the mercy of SARS processes and timelines.
Even after spending hours at a SARS branch to personally hand in verification documentation, they’re still subject to the 21 working days SARS take to accept banking details as verified before the Special Stopper is removed and refunds are released. In the worst situations, some unfortunate taxpayers have patiently waited for the time to pass, only to then be notified of another error on their account that requires verification. Terribly annoying to say the least.
SAIT has reassured the public that they’re engaged with SARS at the highest level with regards to the exponential increase of Special Stoppers being applied on accounts and hope to have clarification and resolution shortly. In the meantime, taxpayers who feel that Special Stoppers have been applied unnecessarily or unfairly are encouraged to contact the SARS Complaints Management Office at 0860121216 to lodge a complaint. Failing outcome with this avenue, escalate the matter to the Tax Ombud.