Eastern Cape government’s tough new tax compliance measures

SEPTEMBER 5, 2014
The Eastern Cape Government will introduce new tax compliance measures from November 1 this year as part of its commitment “to reducing supply chain management-related fraud.

The Eastern Cape Government will introduce new tax compliance measures from November 1 this year as part of its commitment “to reducing supply chain management-related fraud”.

The new measures are also aimed at ensuring that people who conduct business with the State “are afforded no scope to abuse the Supply Chain Management System”.

Planning and Provincial Treasury (PPT) says in a circular that it is necessary to ensure people conducting business with the state are “tax compliant at the date of submission and award of a bid, as well as for the full duration of their respective contracts”.

It explains that in order to give effect to this, South African Revenue Services (SARS) will be implementing an electronic Tax Compliance System (TCS), which will “enable accounting officers and accounting authorities to verify and continuously track the tax-compliance status of all persons conducting business with the State”.

Introduction of the new measures follow an instruction from National Treasury which points out that from November 1, the paper-based tax clearance certificates will be phased out.

From April 1 next year, it adds, paper-based tax clearance certificates will no longer be issued.

One change will require that bid documents provide for the bidder to grant written confirmation on submission of a bid for SARS to disclose his/her tax compliance status to the relevant department on an ongoing basis for the term of the contract.

The circular states that the accounting officer of a department or entity must perform “tax compliance checks” before adding a supplier to a database of preferred service providers and before a quotation is accepted.

Checks must also be done at the time of the submission of the bid; before the awarding of the bid and before any payment is made to suppliers.

Under certain circumstances, the department or entity may withhold payment from non-compliant suppliers of goods. - metrominutes

 

IMAGE sourced from flagstonegroup.co.za