The revised SARS Service Charter has received praise and criticism. It has been described as a more detailed document showing the level of improvement in the South African Revenue Service (SARS).
However, in terms of the Tax Administration Act (TAA), its commitment to dealing with disputes is worrisome, as the promises are far inferior to the law and dispute resolution rules.
Industry bodies such as the South African Institute of Taxation (SITE) and the South African Institute of Chartered Accountants (SAICA) note that the law is clear on timelines when dealing with taxpayer disputes, objections and appeals.
The SARS is bound by the time limit set by law. However, in the service charter it considers compliance with various dispute rules between 50% and 90%.
Somaya Khaki, director of tax for the Syker project, said the SARS’s goal was only to “partially comply” with the legal deadline.
“It simply came to our notice then [it] Taxpayers can only be compared to those who partially comply with their legal obligations, which the SARS Commissioner will not ignore or accept, ”he added.
“It is Psyche’s view that SARS should maintain the same high compliance standards that it maintains with taxpayers and therefore the expected level of service should not be less than 100% compliance.”
He said the deadline for appeals as well as objections and assessment appeals for reasons that SARS and taxpayers must comply with. They are not voluntary or “best efforts” but are bound by law.
Remedy
Both Sait and Saika point out that the rules of dispute provide taxpayers with redress in case of SARS’s non-compliance. However, the exercise of taxpayer rights comes at a price that is unattainable for most. Khaki says if there is a fair, efficient and efficient SARS that upholds the law and is subordinate to it, it will not be needed.
MNSmaricalo Nzimande, a tax executive at ENSafrica, and a member of the Sait Tax Dispute Management Working Group, said the taxpayer’s rights were already covered by the law.
“The TAA’s rules deal with remedies when the SARS fails to meet the deadlines set by the law and the rules of dispute,” he said.
“I expected some kind of link to the rules and remedies under this law that would instruct the taxpayers what action to take if they did not respect the SARS rules.”
Nzimande told the TAA that one remedy when SARS does not comply with the deadline for objections and appeals is to apply for a default judgment. However, this means that the taxpayer has to go to court which, as Khaki mentioned, is unattainable for most taxpayers.
Despite the misconceptions about Article 10 (debate), Nzimande’s overall view of the Charter is that it is an improvement over the 2018 edition. It is much more detailed and shows improvements to the SARS system. The new charter includes more detailed digital functionality and virtual engagement with SARS.
One aspect of the previous charter that raised the taxpayers’ hackle was that SARS only “attempted” to achieve set service level standards. In this version it says that it will achieve set levels.
Click here to download a comparison of ENSafrica’s 2018 and 2022 SARS service charters.
More certainty
An important issue that has not been addressed before is the Voluntary Disclosure Program (VDP).
The TAA does not set a deadline for SARS to finalize VDP applications, but SARS has now committed itself to processing eight out of 10 applications within 90 business days.
“It provides taxpayers with much-needed assurances,” Nzimande said. “It makes it easier for us to advise our clients. Previously there was no way to tell a client how long it could take because some applications take two months, others six months or in some cases more than a year. This is a much-needed improvement. ”
One aspect of the previous charter that raised the taxpayers’ hackle was that SARS only “attempted” to achieve set service level standards. In this version it says that it will achieve set levels.
Confidence in the system
“It’s a big improvement and it shows confidence in their system and their capabilities. I guess the evidence of pudding will be in the food, “said Engimande.
He added that it would be interesting to see if SARS would monitor its ability to meet the commitments set out in the service charter.
Psyche praised SARS for not being blind to its own service delivery challenges and efforts to improve through accountability.
“Psycha fully supports the reconstruction of SARS, which includes developing a highly efficient, diverse, agile, employed and developed workforce, as well as building public confidence and trust in the tax administration system,” Khaki said.