What is search and seizure and why does SARS have this power?

Don't know why SARS conducts search and seizers?

Well, the Tax Admin Act gives SARS powers to gather information.

This means the taxman can come to your premises to conduct a search of your premises.

It can seize any relevant documentation under a search and seizure warrant issued by a judge or magistrate.

There are two types of search and seizures SARS can perform

1. A search and seizure without a warrant; and
2. A search and seizure with a warrant.

Below, the Practical Tax Loose Leaf Service gives you an example for each of these.

Let's take a look.

Example of a search and seizure without a warrant

A SARS auditor reviews Crookall (Pty) Ltd's Vat returns, and he notes huge discrepancies. It looks like Crookall's defrauding the state by creating fictitious suppliers to increase their input Vat.

The auditor calls the director of Crookall, Henry, and asks him about the suspect suppliers. The auditor hears the director's wife in the background screaming, 'Oh my greatness, we're going to jail! Henry, grab the petrol, let's torch this place to destroy the evidence.

She obviously didn't know Henry was still on the phone.

The SARS auditor informs his senior, who listens to the recorded phone call and decides there's reasonable grounds to go and search Crookall's premises because the destruction of evidence is imminent. They decide to search the premises of Crookall without a warrant fearing they'll destroy the fake records to hide their fraud.

Example of a search and seizure with a warrant

Let's use the same example as above, except when the SARS auditor calls Henry, his wife's out spending money on the company credit card and he responds to all the queries raised by the SARS auditor. The auditor requests more information, but Henry replies he's already sent them everything he has.

The SARS auditor still isn't satisfied, and takes his evidence to his senior for review. They suspect Henry's hiding crucial information, which can reveal the fraud.

The senior approaches the court for a search warrant, which in light of the evidence presented, is granted.

Important: SARS'll only perform a search and seizure without a warrant when it suspects that documents or information they require will be destroyed or obstructed if they have to wait for a warrant to be granted.

If a SARS official arrives at your premises to perform a search and seizure ALWAYS ask to see their SARS official identity card first.

Once they've identified themselves as SARS officials, ask to see the search and seizure warrant.

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