SARS Can Hold Bribers Accountable

Corruption and state capture have dominated the collective consciousness of South Africa’s society over the last few years, with many people growing apathetic and tired of the narrative. Honest South Africans fear that high-profile individuals implicated in corruption won’t be convicted of their crimes as the legal process requires concrete evidence of crimes. However, many corrupt people forget about the tools SARS has to hold them to account, similar to the case of Al Capone.

If you are not familiar to the Al Capone tax case, here is a useful link.

So what does a person who has been involved in corrupt activities have to worry about from SARS? Outsourced Finance’s director, Malusi Cwele, illustrates through an example of how SARS can catch a bribe payment to a government official to influence the outcome of a tender process.

Paying the bribe

The main tax consequence from the perspective of the business paying the bribe is that bribes are not a valid tax deduction.  If you use business resources to pay a bribe, it cannot be classified as ‘business development’ or ‘consulting services’. This is the first thing a seasoned auditor will look for when checking for signs of tax evasion. Section 23(o)(i) of the Income Tax Act prohibits the deduction of any payments resulting from corrupt activities.

If you have claimed bribes as a tax deduction in your business by the usual technique of requesting an invoice for ‘business development’, that represents the falsification of your books and overstatement of deductions, which is tax evasion.

If you have not yet filed your tax return and signed your financials, it is recommended that you offer voluntary disclosure to SARS to minimise your penalties. However, this won’t remove the crime and it would be important for you to consult a lawyer.

Receiving the bribe

The main tax consequence from the perspective of the person receiving the bribe is non-disclosure of income received – as bribes can be considered as gross income. If you don’t consider the bribe itself theft or fraud (which would not be gross income), by not declaring the bribe, you have committed tax evasion. This is because it may represent fraudulent non-disclosure of income, regardless of whether the bribe was paid in cash, meat or through your distant cousin twice removed.

If you have received a bribe and have not yet filed a tax return related to the time you received the bribe, it is better for you, in the long run, to come clean to SARS to lessen your penalties. Consult a lawyer for the best advice going forward.


Naturally, Outsourced Finance’s primary recommendation is not to pay bribes or be involved in corruption. Corrupt activities steal from the poor and hold our country back.

Never forget that FICA and other regulations allow the government to collect and process data about cash and electronic transactions.

If any scenario from the above is true for you, we recommend consulting your lawyer for advice. Tax evasion is a criminal offence and the Tax Administration Act provides for a fine or imprisonment for up to five years. Now that won’t look good on your next funding application – not recommended.

Need assistance with making an honest success of your business? Contact Outsourced Finance to help lead you in the right direction.

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