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SARS’ New Search and Seizure Powers… and Your New Rights

30 September 2011   (0 Comments)
Posted by: Author: Monique Vanek
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SARS’ New Search and Seizure Powers… and Your New Rights

Should the Tax Administration Bill be passed in its current form, it will impact the rights of all taxpayer—negatively and positively.Search and seizure of your premises Taxpayers will be affected negatively, as it will allow SARS to knock on your door and conduct a search and seizure without a court order.

SARS may conduct the search and seizure where a senior SARS official has reasonable grounds to believe that there may be imminent removal or destruction of documents likely to be found on your premises, as it argues that if it were to apply for a search warrant,a delay would defeat the object of the search and seizure, says Muneer Hassan, project director of tax for the South African Institute of Chartered Accountants (SAICA). Legal opinion has been mixed on whether this is unconstitutional, but Hassan suggests that one way SARS can overcome the fear is for documents seized to be placed in the custody of the court, and that the court sanctions the seizure after the event.

Audits
Taxpayers will also be affected positively, as SARS will have to keep you in the loop every step of the way in an audit. Currently if you enter an audit process, SARS is not required to do this.Hassan says that once the Bill is passed, SARS will have to give you regular reports on the progress and issue you with its findings—even if it found nothing.

Objections
Another benefit will be that SARS will have to tell you the reasons for disallowing an objection—currently this is provided for in the regulations, but not in the main Act,notes Hassan.

Public protector
A further advantage of the Bill is that it will give taxpayers more avenues for laying complaints.You will be able to lay a complaint with SARS’ Service Monitoring Office(SSMO), then the Tax Ombud, and finally the Public Protector. At any stage you still have access to the courts.

However, Hassan warns that if the Bill is passed in its current form, the independence of the Tax Ombud will be questioned, given that it will be funded from SARS’ budget—even if it is just a perception.Hassan suggests that government moves the funding into the National Treasury Budget, to deal with the perceived conflict.

Hassan also argues that the Tax Ombud's powers are not wide enough in terms of its mandate.For example, if a taxpayer objects to a SARS audit or finding and SARS does not deal with the objection in the prescribed time, then the Tax Ombud should have the ability to mandate SARS to deal with the objection within a reasonable time frame—and if it does not, then the objection should be deemed allowed by SARS.Hassan reckons that the Bill could be signed before the end of year, and certain provisions could become effective on 1 January 2012.

Other areas to be welcomed include the simplicity of the drafting language used, a permanent voluntary disclosure programme, and the extended SARS consultation process adopted with this Bill, notes Hassan.

Source: By Monique Vanek (Tax breaks)



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