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Lawyers for SARS say tax bill does not clash with constitution

17 August 2011   (0 Comments)
Posted by: SAIT Technical
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Lawyers for SARS say tax bill does not clash with constitution

Business Day - Linda Ensor

CAPE TOWN — The Tax Administration Bill, which proposes to give the South African Revenue Service (SARS) extensive powers to search and seize without a warrant, did not appear to be in conflict with the constitution, advocates told Parliament’s finance committee yesterday.

Critics of the bill, which also proposes setting up a tax ombud, have argued that the powers given to SARS were unconstitutional.

However, advocates Gilbert Marcus SC and Steven Budlender submitted an opinion on behalf of SARS which opposed this view. This also applied, they said, to the "pay now, argue later" principle introduced in the bill, which they said had been upheld by the Constitutional Court in the case of Metcash Trading versus SARS.

The advocates said the bill did not afford SARS "absolute, unfettered or d raconian powers" as they would have to be exercised in terms of the constitution and subject to judicial checks and balances.

They said the bill gave SARS the right to engage in warrantless searches only in very narrow circumstances. These included where SARS had reasonable grounds to believe that relevant material was about to be removed or destroyed; was confident it would get a warrant if it applied for one; and believed the delay in getting one would defeat the object of the search and seizure.

South African Institute of Tax Practitioners CEO Stiaan Klue urged the committee to beef up the powers of the proposed tax ombud and ensure its independence, saying that as currently constituted it would be a "toothless" body appointed by and responsible to SARS. It should report directly to Parliament and its powers should be binding, a view supported by the South African Institute of Professional Accountants and PwC. "The bill gives SARS more draconian powers to ensure compliance and this has to be balanced with the perception by the public that the system is fair and that there is a strong watchdog," he said.


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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