On 4 May 2020, the Minister of Finance issued a telling directive in Government Gazette No. 43266, in terms of which “services required to comply with an obligation imposed by or to exercise a right in terms of a tax Act” are expressly included within the ambit of “essential financial services”.

By Jean du Toit, senior tax attorney at Tax Consulting SA

In simple terms, the directive confirms that tax practitioners and other providers that offer these services can operate as normal.

The bigger picture

It is no surprise that tax services would fall under the umbrella of essential financial services – so it is quite interesting that the Minister decided to issue a directive to categorically confirm this. On the same day, SARS officials communicated that they were returning to the office on 5 May 2020.

Perhaps this is purely serendipitous, or perhaps the Minister issued the directive out of necessity, cognisant that SARS is firing on all cylinders from this week onwards. This aligns with what we have experienced in practice, where there is a definite spike in SARS activity.

In light of prevailing circumstances, all of this makes sense – with an ailing economy, the role out a R500 billion fiscal package, together with tax relief measures valued at R70 billion and an existing budget deficit, there is an unprecedented exigence for SARS to collect revenue.

Seemingly, this collection drive will now commence.

What does this mean for taxpayers?

The purpose of the directive can be interpreted in different ways, depending on your perspective.

For tax practitioners, if they had any doubt, they now know they may service their clients in an unfettered manner. Strictly speaking, taxpayers cannot hide behind the acts (or lack thereof) of their tax practitioner, but from a SARS perspective, this kills any narrative that a taxpayer was unable to comply with their tax obligations as a result of a lack of service delivery.

Taxpayers on the other hand may see the directive as a warning – you are expected to meet your tax obligations, in spite of the current circumstances and, on all accounts, SARS will be far tougher this tax season; it simply has to be.