Tax fraud warning for South Africans

Taxpayers are being warned to be vigilant this tax season, as fraudsters are pretending to be the South African Revenue Service (SARS).

The CEO of the Southern African Fraud Prevention Service, Manie van Schalkwyk, told Kaya Biz that several scams are being circulated related to the current tax season.

He explained that SARS is increasing the amount of people being auto-assessed this tax season, and scammers are capitalising on that. 

SARS provides auto-assessments to taxpayers whose tax affairs are less complicated, based on data it receives from employers, medical schemes, banks, retirement-annuity funds, and other third parties. 

Scammers are taking advantage of this process by contacting taxpayers and impersonating SARS.

These fraudsters will tell taxpayers that they are being auto-assessed and, through that process, force taxpayers to divulge a lot of information or pay money into a bank account.

For example, some scammers will inform taxpayers that a tax payment is due and that they cannot register for the new tax year without paying this fee.

Van Schalkwyk said the amount is usually not too high, around R1,000 to R1,500, and many taxpayers will simply pay the amount to get rid of the irritation.

Another scam involves fraudsters contacting taxpayers, pretending to be SARS, and claiming that the taxpayer has a refund due to them.

They will then ask for your banking details, specifically your credit card information, and use that information to withdraw money from your account.

A similar scam involves telling taxpayers that they need to update their information for SARS and then pointing them to a fraudulent link.

Using this link, taxpayers fill in their personal information, which the scammers use to steal their money.

Tax Consulting SA’s Nicolas Botha has also warned that cybercrime is rising, and South Africans’ eFiling accounts are not immune to this threat.

“As technology evolves, so do the tactics of cybercriminals. Unfortunately, your SARS eFiling account is not immune to these threats,” he warned.

Botha pointed to recent SARS reports highlighting a disturbing rise in fraud attempts and breaches of eFiling profiles. 

He warned that these breaches can lead to identity theft, financial loss, and a lengthy process of restoring your good standing with the authorities. 

“These threats have evolved from simple click-bait scams to sophisticated and planned fraudulent activities, often targeting vulnerable individuals such as the elderly, disabled and expatriates,” he said.

“These cleverly orchestrated profile hacks can wreak havoc on a taxpayer’s financial affairs.” 

Some of these tactics involve hacking an individual’s eFiling profile, where fraudsters target taxpayers with disabled children to generate a fraudulent refund. 

This requires detailed knowledge of the taxpayer and careful planning, including updating banking account details with SARS and fraudulently submitting a tax return.

Therefore, Botha warned that extra vigilance may be needed and SARS’s warnings must be taken seriously. 

Spotting a scammer

Van Schalkwyk said there are ways to tell whether you are speaking to a SARS representative or a scammer pretending to be the revenue service.

For example, SARS will always contact you from an email address ending in “.gov.za”. 

He warned taxpayers to be wary of threatening emails stating that they will pay penalties and fines or may even serve jail time if they do not follow the instructions.

“That is typically language that is used in fraudulent emails, so don’t worry too much about them,” he said.

Van Schalkwyk said the scammers will also usually add urgency to the process, which should be a red flag for taxpayers.

In addition, if the email is not addressed directly to you or your business, then it is definitely not from SARS. 

The Revenue Service will use your unique tax number to contact you. Therefore, make sure that the tax number used in the email correlates with your tax number. 

In addition, Van Schalkwyk urged taxpayers to look out for any spelling or grammar mistakes in emails or messages.

“If you see those mistakes, you can 100% know that you are dealing with a fraudster,” he said.