2.3. TAX FRAUD AS A WHITE-COLLAR CRIME
2.3.3 Registering as a taxpayer and tax practitioner
2.3.3.5 The South African Revenue Service disputes resolution systems on E-filing
Discussing dispute resolutions systems via E-filing, Boshoff (2017) refers to a dispute process whereby vital documents cannot be accessed. For example, a request to SARS to explain an assessment (Request for Reasons) is lodged but it is either lost or stuck in the SARS system. By the time it is located and SARS has responded to the taxpayer, the SARS system will have timed out an objection. Thus, if an objection is then received, SARS will disallow it. Similarly, SARS may email a taxpayer who may be slow to respond due to circumstances such as travelling abroad.
Therefore, the listed three new E-filing system upgrades by SARS as commenced from 17 May 2017 include the following:
• The first upgrade is an automated ‘Request for Reasons’ which will automatically give you thirty business days to lodge an objection once SARS has responded to the ‘Request for Reasons’. This facility can be used for income tax (personal and corporate) and for VAT.
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• The second change is to allow VAT taxpayers to request a suspension of payment via E- filing pending the resolution of the dispute process. Current law uses the ‘pay now, argue later’ rule unless taxpayers can defer the payment. This is similar in principle to the ‘Request for Reasons’ principle and has also been welcomed by taxpayers and tax practitioners.
• Finally, SARS introduced a facility on E-filing to apply for late submission of a dispute. This system allows an applicant to ask for a ‘Request for Reasons’, ‘Notice to Appeal’ or ‘Notice of Objection’ after the period to complete these steps has lapsed. The applicant has to submit reasons for the lateness of the submissions. SARS will then consider the reasons for the late application before considering ‘Reason for Request’, among others. Tax experts have questioned how this will work, as clearly the substance of an individual objection is crucial in deciding whether to be allowed to enter into a dispute with SARS.
These are sensible improvements and should reduce communication failures. SARS E-filing is a central point of reference for both the taxpayer and SARS, and having one channel of information will assist and benefit both parties.
This view is contradicted by Pena (2000:398), who states that, with over 3.3 million taxpayers submitting their returns via the SARS E-filing system, a noticeable increase in targeted attacks from cyber-criminals looking to take advantage has been witnessed over the past years. As hackers’ methods are ever evolving to keep up with digital trends, it is important for taxpayers to be aware of tax season-specific phishing tactics. In collaboration of this statement, cybercrime is maturing so quickly that it is difficult, if not impossible, to define it. Quite recently there was no cybercrime, but today (2017), owing to ‘democratic rights’ advertising and 21st century emphasis on knowledge, skills and technology, many individuals experience a myriad of sophisticated technological attacks on a daily. Most of these attacks are targeted against governmental sites and large cyber-based businesses, SARS included. Most computer crimes are easy to commit and it has become increasingly difficult to detect and apprehend the culprit. Moreover, most of these crimes are committed by ‘insiders’ and are never prosecuted.
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The ‘tips following tips’ program are geared towards avoid E-filing scams (Tips to avoid E-filing scams, 2015:n.p). “Exercising some basic email security tips can go a long way towards avoiding online tax scams. Be protective of your main email address – share it only with trusted sources to ensure it does not end up on spam mailing lists. Never open an email from an unknown sender and be careful of strange attachments as these can be malicious. It is not always easy to tell a real email from a phishing attempt. Beware of any emails that ask for personal, tax, banking and E-filing details such as login credentials, passwords and Pins, as SARS will never request such information over email.
• Do not just assume that a cyber-scam will never happen to you. Phishing attacks are very much seasonal, so keep a sharper eye out than normal for suspicious emails claiming to be from SARS during tax season. An excellent resource to keep abreast of these seasonal frauds is SARS itself. Its website has a section devoted to phishing prevention that is always being updated with information on the latest frauds. If you do get an email or phone call that starts ringing the alarm bell, report it to the relevant authorities. Send an email to [email protected] or call the Fraud and Anti-Corruption Hotline on 0800 00 2870.
• Today’s cyber attackers are more sophisticated than ever and are using multiple channels to target taxpayers. Short Message Service (SMS) attacks, known as ‘smishing’, are widespread in South Africa. Never give out personal details through an SMS. Similarly, be careful of unsolicited phone calls from individuals claiming to be SARS employees. If in doubt, phone the SARS contact centre at 0800 00 7277 or visit your nearest branch to verify.
• The SARS website uses password complexity on its E-filing site to ensure that users do not utilise easily cracked passwords. However, there is even more you can do to ensure your password is never compromised. Create a unique password for E-filing that is not the same as the one that you use for any other sites on the web. Not every site utilises strong encryption practices so being hacked on one site can lead to disaster on another. As an additional safety measure, change your E-filing password every tax season.
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2.4. TAX FRAUD AND EVASION: INTERNATIONAL PERCEPTIONS