Non-profit organisations (NPOs) form integral part of our society. SARS encourages public generosity by allowing selected NPOs to issue 18A receipts, making donations tax-deductible expense in the hands of the donors. Regulations are in place to curb corruption and misuse of charitable funds, but they are applied with questionable effectiveness and cause leakages in the system.
Join the mini-Summit hosted by SAIBA on Tax Evasion in Charitable Giving and hear the perspectives from SARS, NPOs and from Fraud experts about the challenges and achievements of implementing section 18A.
Improving tax collection through collaboration: How to protect charitable giving from tax abuse S18A
Summit Date: 2 September 2022
CPD: 2 Units/Hours
Format: Online Zoom Webinar
Nicolaas van Wyk
Nicolaas serves as area President Africa for IAFEI and CEO of SAIBA. He holds qualifications in BCom Hons, MBA and Dipl Corporate Law and is a founding member of CFO Alliance and Past Area President Africa: IAFEI. He has extensive experience in the Professional Body and NPO industry with a long history of training and development. He has authored a number of books and publications.
SARS Segment Lead – Tax Exemption Unit
Minee is the Segment Lead of the SARS Tax Exemption Unit and has extensive experience in the challenges the system face regarding donations to charities.
Executive Member/Director – Operations
Gift of the Givers Foundation
Founded in 1992, Gift of the Givers Foundation is one of the largest Disaster Response and Humanitarian relief agencies, responding to crises around the world. Muhammad Sooliman joined Gift of the Givers as a Regional Director and then later as Director of Operations. In his current role, he oversees finance and operational activities in South Africa. Additionally, he sits on the board of the Malawi and Zimbabwe chapters of Gift of the Givers.
Specialised Investigations | Group Financial Crime, Forensics and Security Nedbank Group Risk
Riaan Beekman is a (FP) SA, CA (SA) and is a Specialist Investigator at Nedbank since 2017. Riaan has extensive experience in the investigation of financial crime, ethics and fraud risk management. He was the Forensic Audit Manager at Impala Platinum from 2012 to 2017, before joining Nedbank. His career in commercial forensics started in 2001 when he joined KPMG (Forensic) as a junior investigator and later became an Associate Director until 2012.
The Purpose of the mini-Summit
The South African economy is navigating shocks of pandemics, global recession, and state capture and energy delivery.
Our response can be improved if we are able to ensure that the tax systems works optimally and stop leakages. This will improve national cash flow and the related adequate funding for service delivery projects.
To improve our response and prevention of tax abuse the profession needs a better understanding of the challenges faced by SARS, the NPO Sector and the common abuse mechanisms deployed.
In this way we can design better engagement standards that focus on specific risk areas. Generic and generalized procedures are not the answer.
About Section 18 A
Section 18A(1) and (2) of the INCOME TAX ACT 58 OF 1962, potentially provide a taxpayer with a deduction for bona fide donations made to any approved organisation, if the donation is supported by a section 18A receipt issued by that approved PBO organisation.
A PBO may issue section 18A receipts only to the extent that the donation will be used to carry on approved activities.
As a result, a number of existing and proposed the requirements are being revised or considered to ensure that the PBO regime and specifically S18 deductions are not abused.
- Obtaining audit certificates as a control measure to ensure that section 18A receipts were issued only for donations that are used for purposes of approved public benefit activities.
- Requiring that PBOs issue IT3s for donations received and sharing with SARS as third party verifications.
Accountants and tax practitioners are an integral part of the economic and tax system, and can play an important part in assisting the fiscus with maximising tax collection.
They can do this by ensuring that their PBO clients understand their duties, assisting with implementing accounting and reporting systems, shunning tax abusers, and issuing audit certificates based on rigorous and relevant procedures.