Fraud Prevention Service Warns Taxpayers About Increase in Deception Schemes During Tax Season

The Southern African Fraud Prevention Service (SAFPS) has cautioned taxpayers to remain vigilant during tax season as cybercriminals are employing convincing schemes that imitate official correspondence from the South African Revenue Service (SARS).

Adapting Scammer Tactics

As SARS simplifies tax filing through digital services and provisional assessments, fraudsters are modifying their methods to target unsuspecting payers. The head of SAFPS, Mani van Schalkwyk, noted that tax season consistently attracts criminals looking to exploit consumers.

He emphasized that scammers are constantly refining their approaches, making it crucial for consumers to be aware of the latest tactics and remain cautious throughout the filing process.

Common Types of Fraud

One of the most frequent forms of deception involves phishing emails and SMS messages allegedly originating from SARS. These messages often direct taxpayers to fake websites where criminals attempt to steal login credentials, bank details, and other personal information.

Van Schalkwyk reported that fraudsters frequently make subtle changes to email addresses or website links, which makes identifying fraudulent messages difficult. Taxpayers are strongly advised to carefully check the sender's address, remembering that official correspondence from SARS is sent from the @sars.gov.za domain.

Another common scheme relates to false tax refund notifications, claiming that a taxpayer is entitled to a refund. Victims are prompted to click a link to confirm banking details or complete a verification procedure before funds are transferred.

SAFPS advises verifying any refund notification by logging directly into one's eFiling profile on the SARS website or using official SARS communication channels, rather than following links in unsolicited emails or SMS.

Fake Payment Notifications

Scammers also send fraudulent notices about unpaid taxes, threatening fines, lawsuits, or account restrictions if immediate payment is not made. These messages often contain false bank details or links to fictitious payment portals.

SAFPS reminded taxpayers that SARS is a pre-approved recipient of funds in South African banks and never requests payments to unknown accounts provided through unauthorized correspondence.

The organization also warned about identity theft, where criminals impersonate SARS employees via phone, email, or messengers. They claim there is an issue with a tax return or refund before attempting to obtain identification numbers, tax reference numbers, bank details, or one-time passwords.

Van Schalkwyk stated: 'SARS representatives will never request confidential personal information or banking details in this manner.' Furthermore, SAFPS pointed to the growing threat of eFiling profile hijacking, where criminals use stolen personal data to change the bank details linked to taxpayers' accounts and redirect legitimate tax refunds to fraudulent accounts. Victims often only discover the fraud after their refund has already been sent to an unknown bank account.

Data Protection Precautions

To reduce the risk of fraud, taxpayers are advised never to share eFiling logins, passwords, banking information, PINs, or card details in response to calls, SMS, or emails. Consumers should contact SARS services directly through the official website, rather than clicking links received via email, SMS, or WhatsApp.

Additional protection can be achieved by using strong passwords, multi-factor authentication, and avoiding public Wi-Fi networks when accessing sensitive financial information. Anyone who suspects their tax profile or refund has been compromised should immediately contact their bank, notify SARS, and report the incident to the South African Police Service.

Suspected fraud can also be reported to SAFPS through its Yima platform, which allows users to report schemes, check suspicious web links, and receive information on the latest fraud trends. Van Schalkwyk concluded: 'Scammers continue to develop their tactics, but consumers can significantly reduce their risk by staying informed, checking every message, and using trusted platforms for reporting.'

iol.co.zaJuly 28, 11:41

Increased Fraud Risk During Tax Season in South Africa

As tax season approaches, South Africans are reminded to remain vigilant. Since fraudsters' tactics are becoming increasingly sophisticated, understanding the signs of potential deception is critical for protecting personal and financial information.

Threats During Tax Period

During the filing of tax returns, millions of taxpayers are required to fulfill their fiscal obligations. However, amidst this rush lies a serious threat: fraudsters demonstrate an astonishing ability to exploit unsuspecting individuals. As the South African Revenue Service (SARS) refines its digital submission processes, including pre-assessment features, complex fraud schemes mimicking legitimate correspondence from tax authorities have become more frequent.

Mani van Schalkwyk, CEO of the South African Fraud Prevention Service (SAFPS), warns that the urgency of tax season often leads to complacency, which fraudsters quickly exploit. He notes: 'Tax season constantly attracts fraudsters looking to take advantage of taxpayers. Fraudsters are constantly adapting their methods, so it is crucial for consumers to understand the latest tactics and remain vigilant throughout the filing process.'

Common Fraud Schemes

Fraudulent tactics are diverse, but the most common strategies include phishing emails and SMS messages. These fraudulent messages often impersonate SARS employees, pressuring unwary taxpayers into disclosing confidential data or making payments under false pretenses.

Phishing Attacks

The fraudulent messages allegedly come from SARS and contain links to fake websites designed to collect login credentials, bank details, and other personal information. Van Schalkwyk advises: 'Always carefully check the sender's address. Official SARS correspondence comes from the domain @sars.gov.za. If the address differs, treat it with suspicion and avoid clicking any links.'

Fake Refund Notifications

Fraudsters frequently send messages promising refunds, urging recipients to click links to confirm bank details or complete verification. The allure of unexpected payouts can cloud judgment, causing many to ignore warning signs.

Unpaid Obligation Notices

Fraudsters may warn taxpayers about outstanding debts, threatening fines or legal action. Such messages often include altered bank details or direct users to fraudulent payment portals. It is important to remember that SARS does not request payments to unknown accounts provided through unsolicited communication.

Impersonation Fraud

The rise in impersonation fraud is evident as criminals directly contact taxpayers via phone, email, or messaging apps, pretending to be SARS representatives. These fraudsters may claim issues with tax returns or refunds and demand confidential personal information.

eFiling Profile Hacking

A growing problem is the hijacking of legitimate SARS eFiling profiles by criminals. They alter personal information to change the bank details linked to accounts, redirecting legitimate refunds to accounts controlled by criminals. Victims often only discover this after noticing discrepancies in refund amounts.

Protecting Against Tax Fraud

SAFPS emphasizes that awareness serves as the first line of defense against tax-related fraud. Taxpayers are strongly urged: never share eFiling usernames or passwords; avoid disclosing banking information, Personal Identification Numbers (PINs), or card details in response to unsolicited messages; conduct all tax payments exclusively through official SARS platforms or verified banking channels; refrain from clicking on links received via email, SMS, or messaging apps, and always contact SARS services directly through their official website; use strong passwords, enable multi-factor authentication, and avoid public Wi-Fi when handling sensitive financial information.

Van Schalkwyk also stresses the importance of remaining vigilant regarding messages that create a sense of urgency or coercion. He cautions: 'Fraudsters rely on scare tactics to prompt hasty decisions.'

Actions if Fraud is Suspected

If taxpayers suspect their tax profile or refund has been compromised, immediate action is necessary. They should contact their bank, notify SARS directly, and report the incident to the South African Police. Furthermore, incidents can be reported to SAFPS via Yima at www.yima.org.za, providing access to vital information on new fraud trends.

SAFPS also provides Protective Registration to mitigate the risks of personal data theft and assists victims through a dedicated database. These services are provided free of charge. Van Schalkwyk concludes: 'Fraudsters continue to develop their tactics, but consumers can significantly reduce their risk by staying informed, scrutinizing every message, and using secure reporting platforms.'

iol.co.zaJuly 21, 14:53

South African Expats Reminded of Tax Obligations to SARS

South Africans living abroad have been warned that they may still be required to file tax returns with the South African Revenue Service (SARS), even if they have resided overseas for many years.

Tax Residency Conditions

The warning was issued by John-Paul Fraser, Head of Cross-Border Taxation Group, and Vivian Cox, an expatriate tax consultant from Tax Consulting South Africa. They noted that many expats mistakenly believe that moving abroad automatically exempts them from the South African tax system, but this is often not the case.

According to the Tax Administration Act 2011 (Act No. 28 of 2011), the requirement to file a return depends on several factors. These include the expat's tax residency status, the nature and source of their income, and whether they maintain financial interests in South Africa.

Increased SARS Scrutiny

The consultants emphasized that as SARS continues to strengthen its compliance capabilities and increase oversight of offshore structures and international income, expats should take the opportunity to review their filing obligations and ensure they understand whether they are required to submit a return.

Physical relocation abroad does not automatically terminate a taxpayer's relationship with SARS. The key issue is whether the individual has formally ceased their tax residency in South Africa. If this has not happened, SARS may continue to consider the person a South African tax resident, which entails ongoing obligations to report worldwide income and assets.

Important Aspects for Taxpayers

Tax Consulting South Africa pointed out that for expats who are still recognized as South African tax residents by SARS, the following aspects may be relevant for complying with tax legislation: income from foreign employment, offshore investment portfolios, interests in foreign trusts or companies, foreign bank accounts, and international pension structures.

The organization added that foreign income and offshore assets remain important factors for taxpayers who have not terminated their tax residency in South Africa. It was also noted that South Africans abroad should not assume that income thresholds or automatic assessments by SARS automatically remove the need to file a return. Although SARS may issue such assessments based on sufficient third-party data, offshore income and international assets are not always fully reflected in its records.