By Amanda Visser (Business Day)
THE Tax Administration Bill, introduced almost a year ago, could be promulgated within the next four to six weeks, although it is still not certain if all provisions in the bill will be effective immediately.
The bill puts wide-ranging powers in the hands of senior officials at the South African Revenue Service (SARS) — including the right to enter a taxpayer’s premises without a warrant in certain circumstances and to search and seize documents.
Edward Nathan Sonnenbergs (ENS) tax executive Beric Croome expressed concern at a seminar in Johannesburg yesterday that SARS would not be ready to implement all the provisions at once as some of its systems still had to be refined, with staff needing training.
Tax experts from ENS said taxpayers would have to acquaint themselves with the bill and ensure they knew their rights in terms of SARS information-gathering powers during audits, criminal investigations, inquiries and search-and-seizures.
Ernie Lai King, a tax executive at ENS, said there was a disconnect between the officials conducting an audit and those conducting the criminal investigation. He told of instances where taxpayers received telephone calls from the police after an audit, informing them of fraud charges against them and requesting them to present themselves at a police station.
"That person will be arrested and put in jail. When that call comes, do not go to the police station without legal representation," he said.
Mr Lai King also referred to situations where a taxpayer was asked to appear before a tax inquiry. The presiding officer in these proceedings, he said, was not a friend of the taxpayer. "He is the friend of the tax authority. He is appointed by the tax authority and will be paid by the tax authority…. He wants to be appointed again."
In most cases the presiding officer will be a senior counsel who has the same powers as those vested in a president of the tax court. One of the issues confronting a taxpayer appearing before such an inquiry was that he may not refuse to answer a question on the grounds that it may incriminate him.
SARS had previously said these harsh provisions were aimed at tax evaders, and should not affect compliant taxpayers. Mr Lai King was not altogether convinced.
"Sometimes the distinction between the bad guys and the good guys gets lost. People who are not bad guys are considered bad guys and are pulled into this process and it is not pleasant."
Dr Croome said the creation of a legal framework for a tax ombudsman was a step in the right direction, but the person who got the job would be critical to the office’s success.
"The office can be an effective remedy for taxpayers that have grievances with SARS," he said.