Fears of revenue offices accessing bank accounts linger after refund tax up

Published Aug 27, 1997

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The stir created by the South African Revenue Service accidentally paying about R21 million into the accounts of about 6 000 taxpayers around the country is still creating waves.

A Cape Town financial consultant last week reported that at least two of her clients had had money taken out of their bank accounts by the taxman.

She questioned how not only the taxman, but the banks as well, were able to do this without the permission of, or any notification to the bank account holders.

Many taxpayers will be unsettled by the possibility that the government can rifle their bank accounts, as governments are not respected for restraint when it comes to taking money from the public.

Christo Henning, media liaison officer for South African Revenue Service, said the reported R21 million of erroneous payments included some legitimate refunds and some which were incorrect.

The refunds were not only for the 1996 tax year but for previous years as well, he said.

To rectify the situation, the taxman decided to cancel all the refunds and start from scratch. The Reserve Bank instructed commercial banks to reverse these transactions, and the taxman was liable for the bank charges incurred, which totalled about R250 000.

"No-one was worse off as a result of the reversal of this transaction," Henning said.

"On their bank statements, those taxpayers will see the amount going in and then going out again immediately.

"If money is due to a taxpayer, we will be making a deposit of the correct amount in the future," he added.

Under no circumstances may the taxman or the banks simply take money out of individual's private accounts.

If the tax office has a problem with a taxpayer, it may apply to a magistrate and if a court order is granted, the tax office may be given access to the taxpayer's bank statements.

If a taxpayer is in arrears, the taxman will pursue the matter through the courts and the decision to freeze or sell assets will lie with a judge.

"We don't have the authority to withdraw money from a bank account," Henning said.

"In this case it is a reversal of an erroneous payment, not a withdrawal of money due from a taxpayer."

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