04 Apr 2018

SARS Outsourcing One of Its Core Functions: Is This Cause for Concern

by Anton Lockem, Partner, Durban,
Practice Area(s): Corporate & Commercial | Tax |

By the Shepstone & Wylie Tax team

Currently over 2.3 million taxpayers and traders owe SARS just under R150 billion. SARS announced on 9 March 2018 that it has outsourced the older and relatively smaller amounts due to it to a number of debt collection agencies through contracts that will run until the end of February 2019. These agencies include:

  • CSS Credit Solution Services
  • ITC Business Administrators
  • Medaco Capital Services
  • New Integrated Credit Solutions
  • Norman Bisset & Associates Group
  • Revenue Consulting
  • Transactional Capital Recoveries
  • Van De Venter Mojapelo

SARS has stated that: “Taxpayers and traders with outstanding accounts will only be contacted via electronic channels…the agencies will embark on the traditional debt collection activities.” These traditional activities will include outbound calls, tracing of taxpayers and sending out notices (SMSs, emails or letters/notices).

Non-compliant taxpayers may face further interest or penalties and possibly criminal charges.

The question that everyone is wondering, however, is why SARS is outsourcing one of its core functions, especially considering that it did so in 2016 with limited success?.

There is a huge complacency amongst the general public in South Africa when it comes to paying tax, however, tax morality works both ways. The fiscal deficit means that SARS is chasing a huge target and it would appear that they are now recruiting all the help they can get for collections.

Taxpayers and traders with outstanding accounts can expect communication from the appointed agencies in due course. The deadline for outstanding tax returns and payments due by end March, is Thursday 29 March 2018. Due to the long weekend, SARS has requested taxpayers to pay by 12-midday.

If you are contacted by SARS or one of the debt collection agencies and have an objection to raise with regards to the accuracy of information in the SARS’s debtors’ book, your assessment or a decision taken by SARS, please contact:

Anton Lockem
Head of Tax
+27 315757413


Andrew Staude
Tax Partner
+27 315757202