Tax chaos hits employers

TEST CASE: SARS DELAYS PUSH DISPUTES INTO YEARS-LONG LIMBO WITH RISING BILLS

- Amanda Visser

Employers disputing disallowed Employment Tax Incentive (ETI) claims continue to face significant delays and financial exposure.

A test case intended to resolve the matter has yet to be heard on its merits, with interlocutory proceedings further postponing progress.

ETI disputes between the South African Revenue Service (Sars) and taxpayers have been mounting since July 2021.

More than 400 employers have agreed to stay their disputes pending the outcome of the test case, leaving them subject to accumulating penalties and interest while the legal process remains unresolved.

The test case

“Taxpayer TAT” entered into limited duration contracts of employment with various employees for a period of 12 months. It ran a skills development initiative in partnership with a training institution, which formed the basis of its ETI claims.

The remuneration due to the employees under their contracts was paid directly to the training college to offset the employees’ tuition obligations.