South African banks could get new powers to freeze SARS tax refunds

• South African banks could get new powers to freeze SARS tax refunds, allowing them to temporarily hold suspicious refunds for up to two business days while the tax authority investigates.
• The proposed amendment aims to combat tax fraud by using banks as an early warning system, building on SARS' existing efforts to prevent fraudulent refunds and its success in reducing VAT refund scams.
• The draft legislation has sparked concerns about the lack of guidance on how banks will decide whether a refund is suspicious, with the tax authority's fraud detection measures set to be extended to personal tax refunds amid a rise in SARS-related scams.