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The South African Revenue Service (SARS) said on Thursday it is imposing stricter conditions on those seeking to register as VAT vendors after it noticed a concerning trend in suspicious activity.
In the month of April, specifically, SARS said it saw a significant spike that required it to conduct an urgent review of its registration process, believing large numbers of registrations are being conducted with an eye to committing 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 applicant 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 pre-booked 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 Commissioner Edward Kieswetter apologised in a statement to "honest taxpayers" for any inconvenience that this may cause.
"SARS is a critical institution in nation building and strengthening our democracy by discharging its responsibility of collecting revenue, improving compliance, and facilitating legitimate trade to help build a capable state," he said. "SARS carries out this mandate without fear, favour or prejudice.
"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," he added.
"Those who underestimate our resolve, do so at their own peril."
In the 2023 financial year a record R381 billion in refunds were paid, of which R319 billion were VAT refunds. Higher-than-expected VAT refunds contributed to government's unexpected primary budget deficit in the past year.
