ARS Detects Unusually High Number of Suspicious VAT registrations

On 11 May 2023, the South African Revenue Service (SARS) issued the following media release:

SARS has noticed a trend of suspicious registrations by VAT vendors. In the month of April, specifically, we saw a significant spike that required us to conduct an urgent review of our registration process. A key strategic objective and design principle of our administration platform is to provide ease of registration. This must be balanced with the risk of abuse and attempts by individuals to obtain a VAT number and claim fraudulent refunds.  We were alerted by our sophisticated risk engine that there was an unusual increase in the number of registrations, all of which were suspicious. Our analysis suggests that large numbers of these registrations are being created with the intent to defraud SARS and, by implication, honest taxpayers.

As a result of our observations in VAT registrations, and the increase in the potential for fraud, the following is to be implemented with immediate effect.

All new applications for VAT registration will be subjected to a more stringent registration process which could include the requirement that the applicants present themselves, in person, to the branch closest to where the business enterprise is located for validation and accreditation.

Where applicants are expected to visit a branch, the visit must be prebooked on the SARS website, by clicking on the “Book an Appointment” icon.

All supporting documents that are required for registration validation must be submitted at the branch on the day of the appointment.

VAT registration will only be effected when SARS has satisfied itself that the application is lawful.

SARS is ready to pursue criminal charges against these perpetrators. Those that steal from the fiscus simply increase the overall tax burden on the rest of us who honestly pay our taxes.

The SARS Commissioner issued a stern warning to those engaged in these schemes, saying: “SARS is augmenting its human effort using data insights, artificial intelligence and machine learning algorithms to enhance its capability to identify those engaged in criminal activity. Those who underestimate our resolve do so at their own peril. Furthermore, I wish to apologise to honest taxpayers for the inconvenience that this may cause.

SARS Detects Unusually High Number of Suspicious VAT registrations | Freight News

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