Protect Your Business: Spotting and Avoiding Tax Scams

On a typical Monday morning in a bustling city like Johannesburg, small business owners are usually quick to check their emails. Imagine receiving one that appears to be from the South African Revenue Service (SARS), claiming you’re eligible for a substantial tax refund. Initially, you might feel puzzled, then surprised, and soon excited at the prospect of a financial boost for your business.

This excitement could lead you to click on the provided link and enter your business banking details. But days later, you find your business bank account has been emptied. Shock. Horror. Despair. You’ve been scammed.

This scenario is a snapshot of the havoc a tax scam can wreak. With tax filing season upon us, the danger of falling victim to such scams is at its peak. Protecting your business means recognizing the red flags and taking preventive measures. Here’s how you can arm yourself against these malicious schemes.

Phishing Emails and Fake Refunds: These deceptive emails mimic SARS communications, tricking you into sharing personal information. They often notify victims of a tax refund and prompt them to provide bank details. Once given, scammers can directly steal funds from the victim's account.

Due Date Threats: Scammers pose as SARS officials, threatening legal action or arrest if immediate payment isn’t made. They may request payment through unconventional means like prepaid cards or wire transfers.

Auto-Assessment Fraud: With SARS’s increased use of auto-assessments, scammers exploit this by sending fraudulent assessment notices and redirecting victims to fake websites. These sites replicate SARS’s official website to harvest personal information.

SMS Scams: Fraudulent SMSs claim you owe tax or are due for a refund, urging you to follow a link or contact a number. Always verify the authenticity of such claims.

Spotting the Red Flags – Telltale Signs of a Scam

To avoid falling victim, stay alert for these warning signs:

• Email Source: Authentic SARS emails come from a @sars.gov.za address. Be cautious of sub-domains or misspelled email addresses.

• Urgency and Threats: Scammers often create a sense of urgency, threatening penalties or legal action if immediate action isn’t taken.

• Personalization: Genuine SARS communications include your personal tax number and other identifying information. Lack of such details is a red flag.

• Grammar and Spelling: Poorly written emails with spelling or grammatical errors are clear signs of unprofessionalism and should raise suspicion.

• Requests for Personal Information: SARS will never request your banking details, login credentials, or credit card information via email or SMS.

• Suspicious Links and Attachments: Be wary of links directing you to unfamiliar websites or emails with attachments, especially .htm or .html files.

Practical Steps to Protect Your Business

Understanding the different types of scams is just the beginning. Here are practical steps to stay ahead of scammers and protect your business:

• Verify Communication and Authenticity: Always verify the authenticity of any communication from SARS. Contact SARS directly using the official contact details available on their website. Remember, SARS will never ask for your banking details via email, SMS, or over the phone.

• Educate Employees: Ensure your team is aware of these scams. Conduct regular training sessions on identifying and responding to suspicious communications.

• Secure Your Information: Use strong, unique passwords for your SARS eFiling account and other sensitive accounts. Regularly update these passwords and use two-factor authentication where possible.

• Report Suspicious Activity: If you receive a dubious email or call, report it to SARS’s Fraud and Anti-Corruption hotline (0800-00-2870) or email. This helps SARS track and mitigate ongoing scams.

• Secure Payments: When making payments to SARS, use the official banking details provided on their website. Avoid using account numbers provided in emails or phone calls.

• Stay Informed: Stay updated on the latest scam tactics by regularly visiting the SARS website and subscribing to their alerts. The SAFPS also provides resources and a platform to report fraud through their Yima tool, which helps secure identities and scan websites for vulnerabilities.

By being aware of the common tactics used by scammers and taking proactive measures, you can protect your business from falling victim to tax fraud. Remember, when it comes to tax scams, vigilance and education are your best defenses.

• SARS-SCAM-365: An email titled “Eligible for a refund” sent on 11 July 2024.

• SARS-SCAM-362: A message regarding a tax refund on 13 June 2024.

• SARS-SCAM-357: An email scam titled “Notification from SARS” on 26 April 2024.

Each of these scams uses urgency and authenticity to prompt immediate action, preying on unsuspecting taxpayers.

Conclusion

Tax scams pose a significant threat to businesses, especially during the filing season. By staying vigilant, verifying all communications, and educating your team, you can protect your business from these deceitful practices. Remember, SARS will never ask for sensitive information via email or SMS. When in doubt, always contact SARS directly. Shield your business from tax scams and ensure no loose ends are left for scammers to exploit.