SARS eFiling hacking concerns

The Tax Ombud is investigating complaints against the South African Revenue Service (SARS) for allegedly failing to help taxpayers whose eFiling profiles were hijacked.

The Office of the Tax Ombud announced this investigation alongside the tabling of its 2023/24  Annual Report.

The organisation confirmed that it has sought and obtained approval from Finance Minister Enoch Godongwana for this investigation.

The investigation will look into possible systemic and emerging issues related to SARS’ alleged service failures in timely assisting taxpayers with eFiling profile hijacking. The taxman is required to do so under the Tax Administration Act.

This comes after the Office of the Tax Ombud received complaints and queries from taxpayers and industry bodies and discussions during the public workshop with SARS on 13 June 2024.

Both SARS and external stakeholders, including industry bodies, have already been notified. 

As part of the investigation, the Office of the Tax Ombud said it will engage SARS, concerned taxpayers and their representatives, including their relevant industry bodies. 

Thereafter, a report on the review containing recommendations will be submitted to the Finance Minister.

At the start of this year’s tax season, Tax expert Nicolas Botha warned South African taxpayers that cybercrime is rising and that their eFiling accounts are not immune to this threat.

Botha is the manager of Tax Consulting SA’s Tax Team Compliance & Processing and said that cybercrime is advancing at an alarming rate. 

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

Botha pointed to 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. 

“It is crucial to actively protect your registered details and monitor activities on your SARS profile,” he said. 

“Regularly reviewing your SARS account activity, updating security measures, and staying informed of potential threats are essential steps to safeguard your personal and financial information.”

The launch of the Tax Ombud’s investigation comes after Finance Minister Enoch Godongwana delivered the Medium-Term Budget Policy Statement (MTBPS) on 30 October.

In his statement, the minister revealed that tax collection for 2024/25 is expected to be R22.3 billion lower than what the Treasury estimated in February this year.

In addition, he said that, over the next two years, the main budget revenue estimate has also been lowered by R31.2 billion.

“In the absence of faster growth and in the face of external risks, tax revenue will remain under pressure, forcing us to make difficult decisions on where to spend,” he said.

“Lower revenue also means that we cannot, within the envelope, accommodate all of the demands on the fiscus.”

Godongwana said difficult trade-offs in all spheres of government will have to be made.

Despite the weaker revenue, Godongwana said the government’s most immediate spending pressures will be addressed and outlined additional funding requests for various state entities.

This included additional funding for SARS to help the organisation build on its successes by driving programmes to enhance the efficiency of revenue collection whilst enhancing compliance and facilitating legitimate trade.

This article was first published by Daily Investor and is reproduced with permission.