Tax Ombud Invites Public Comments on Draft Report Into eFiling Profile Hijacking

Between 3 February and 5 March 2025, the OTO conducted an eFiling Profile Hijacking Survey to capture taxpayer experiences and identify key vulnerabilities.

The Office of the Tax Ombud (OTO) has formally called on the public to provide written comments on its Draft Report into alleged eFiling profile hijacking, a growing problem that has left taxpayers and practitioners vulnerable to fraud and identity theft.

In a statement released on Wednesday, the OTO said the invitation for public participation is part of its mission to develop a robust and effective response to the problem, ensuring stronger protection of taxpayers’ rights and restoring public confidence in South Africa’s tax administration system.

“By inviting public participation, the OTO aims to develop a robust and effective response to eFiling profile hijacking, thereby ensuring protection of taxpayers’ rights and enhancing trust in South Africa’s tax administration system,” the Ombud said.

Background to the Investigation

The Draft Report was compiled after an extensive OTO investigation into allegations of eFiling profile hijacking, a form of digital fraud where third parties gain unauthorized access to taxpayer eFiling profiles, leading to fraudulent transactions or the interception of refunds.

Between 3 February and 5 March 2025, the OTO conducted an eFiling Profile Hijacking Survey to capture taxpayer experiences and identify key vulnerabilities. Preliminary findings were presented to stakeholders at a public workshop on 28 May 2025.

Originally, the OTO planned to release the Draft Report for public comment in July 2025. However, the South African Revenue Service (SARS) requested additional time to respond to the findings and recommendations. Consequently, the publication date was postponed to 31 August 2025, and later delayed again due to ongoing engagements between SARS and the Ombud.

Key Findings

The Draft Report reveals worrying trends about the scope and nature of eFiling profile hijacking:

• Target Groups: The practice is most prevalent among tax practitioners and individual taxpayers.

• Tax Types: Most cases involve Personal Income Tax and Value-Added Tax (VAT).

• Fraud Amounts: While fraudulent transactions typically involve amounts under R10 000, some reach as high as R100 000.

• Vulnerabilities Identified: Weak authentication processes, delayed fraud detection, slow SARS response times, insider threats, and low digital security awareness among taxpayers are among the primary factors enabling this fraud.

Recommendations

The Draft Report outlines several recommendations aimed at various stakeholders:

• SARS: Enhance authentication protocols, improve fraud detection and refund verification systems, boost taxpayer education, and strengthen collaboration with banks, the Companies and Intellectual Property Commission (CIPC), and the South African Police Service (SAPS).

• Tax Practitioners: Tighten controls on third-party access to eFiling profiles and uphold high professional conduct standards.

• Taxpayers: Use strong passwords, activate two-factor authentication, and regularly monitor eFiling profile activities to detect suspicious transactions early.

• National Treasury: Amend provisions in the Tax Administration Act and establish an Inspector-General, as recommended by the Nugent Commission of Inquiry.

• South African Reserve Bank: Investigate potential banking irregularities linked to eFiling profile hijacking.

Accessing the Draft Report

The full Draft Report can be accessed online at: https://www.taxombud.gov.za/oto-draft-report-on-the-investigation-into-alleged-efiling-profile-hijacking/

Written comments should be sent to communications@taxombud.gov.za. The deadline for submissions is 31 October 2025. Additional information is available on the official OTO website at www.taxombud.gov.za.

Building a Safer Tax System

The OTO has framed the report and its recommendations as a critical step toward safeguarding South Africa’s digital tax administration environment. By enhancing security and collaboration between institutions, the Ombud believes the country can combat fraud, protect taxpayers’ rights, and strengthen public trust in the eFiling system.