At a meeting with some senior SARS management in July a question was raised by a payroll specialist on whether they were aware of the public being approached by debt collectors apparently appointed by SARS to collect taxes. SARS had no comment at the time.
Then later in July a number of media outlets ran reports noting SARS had appointed the following three companies as debt collectors:
- NDS Credit Management
- CSS Credit Solutions
- Lekgotla Trifecta Collections
Interestingly, it is reported in one of the article that SARS made an announcement about this in late 2015. We have looked on SARS website and we cannot find any media release about this announcement. In addition, in searching for the above company names, there is no mention on the website either.
So why do we care?
We won’t go into the issue of whether appointing debt collectors is the best use of taxpayers’ money.
Instead, SARS themselves puts it perfectly (ironically on their website) when they warn against tax scams (http://www.sars.gov.za/Media/MediaReleases/Pages/6-June-2016—SARS-warns-against-tax-scams.aspx) and people posing as tax agents. We live in a society where scams are rife and here SARS have invited three new foxes into the chicken coop and three new identities for fraudsters to emulate.
If SARS really wishes this to work effectively then they should issue clear communications to all impacted parties setting out the names of the collectors, how they can be recognised and more importantly:
- The information the collectors have been provided about the taxpayer;
- The information the collectors will never ask from the tax payer (bank details etc.);
- Guidance that when in doubt the tax payer should always phone SARS and should never give away personal details over the phone when called by a collector; and
- Clear instructions that for safety all payments should be made directly to SARS and never to a collector (no clear audit trail);
As an aside, experience in the UK with HMRC using debt collectors is often there is a disconnect between the tax authority’s and the collector’s records. The collector often pushes for repayment of debts already paid to SARS. The onus is often on the taxpayer to then try and recover the overpayment from the authorities which can take some time. Not ideal in a South African context when refunds generally take a while to happen.