‘Farm diesel auditors don’t work on commission’ – SARS

The South African Revenue Service has refuted an assertion that its farm diesel-use auditors work on commission.

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It is believed that the allegation might have originated from farmers whom the auditors had fined for failing to keep accurate records of farm diesel usage but still claiming a diesel rebate. Farmers’ unions Agri SA and TAU SA both reported that they had received complaints from members who had been fined, sometimes hundreds of thousands of rand, by SARS auditors this year, for not having farm diesel-use records in a format required by the auditors.

Several of these complaints were reportedly from farmers who felt that they had been unfairly fined, despite having kept what they believed to be the correct records for diesel use. TAU SA noted, however, that only a few of its members had actually been fined by SARS, and that some farmers had even praised the manner in which auditors had conducted the audits.

SARS spokesperson Malerato Sekha explained that farmers’ requirements for keeping farm diesel-use records were explained in Schedule 7 and Section 75 of the Customs and Excise Act of 1964. “There is specific information that the claimant must have before he submits his diesel rebate claim to the SARS Commissioner,” said Sekha. “It is this information on which the claimant bases his claim and shows why he is of the opinion that his diesel usage is eligible.

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“In instances where the information is available, but not in a manner in which the official can practically assess the information, the official can guide the farmer to provide it in a format which will comply with the legislation.” She added that if a farmer had failed to keep any form of record, however, it would be unclear on what information the farmer would have based his claim.

A KwaZulu-Natal farmer, who wished to remain anonymous due to his current query with SARS, said that while he felt that his farm diesel use records had been up to standard, he was still required to repay two years’ worth of diesel rebates that he had previously claimed. He said his SARS diesel-use auditor had stated that he had not kept a logbook for each diesel-powered farm machine.

“The logbook had to indicate the litres that the machine had used, the hours it operated, the dates it was used, what the machine was used for, and other aspects,” the farmer said. “But SARS already knows our expenses based on our tax returns. Why do they want such specifics, and the in and out hours of each machine?”

He indicated that he was in the process of appealing the fine. “The auditors drank our tea, ate our biscuits and didn’t even let on that there was a problem,” he said. “A few days later, I got an email saying I had to pay back two years’ worth of rebates. These guys knew straight away that they were going to demand the rebate but they still kept us busy for the duration of their visit. I’m not a crook. I really thought that I was doing things the right way.”

Sekha stressed that the auditors were bound to audit farmers in accordance with the requirements of the legislation. “The official can’t therefore ignore the prescriptive nature of the legislation, but will, if it is reasonable, request the client to provide the information in a format that could comply,” she said.  “If the client is not able to comply with the relevant legislation, it will not be in the power of the officer to amend the legislation. Should any farmer, however, be aggrieved by a decision of an officer, he may appeal.”