During a recent consultation, I noticed that SARS had taken 39 months to finally dismiss an objection. To add insult to injury, SARS then proceeded to take another seven months, from the date of the tax board’s decision, to the date of issuing the necessary assessment, to reflect that judgment.SARS’ written reason, for the latter delay, was that "their system was down”.
The objection dealt with two simple questions
Firstly, did the taxpayer trade during the particular tax periods as an independent consultant? Secondly, did the expenses which he had claimed constitute allowable deductions? In the light of these simple questions, it is inconceivable that this objection took so long to consider.
In yet another matter, SARS took seven months to deal with an application for the waiver of penalties and interest.The penalties and interest were imposed as a result of the late payment of employees’ tax. In these cases there is no prescribed time period in which SARS is obliged to respond.However, seven months appears to be an inordinately long time.In recent months, SARS has used the slogan At Your Service, presumably to advertise its readiness, and willingness, to assist taxpayers.I respectfully submit that the unreasonable and inexplicable delays, experienced by the above-mentioned taxpayers, cast very serious doubt on SARS’s claim.
I am supported in this conclusion by the fact that in another matter, SARS took some 19 months to dismiss an objection, which sought to tax reimbursed expenses.The dispute appears to be a rather simple one, and it is again not clear why this matter took so long.These matters should be viewed in light of the fact that SARS is granted 90 business days, calculated from the date of receipt of the objection, in which to deal with that objection.This presumes that SARS has all the information with which to make its decision.If SARS requires further information, it is granted 60 business days, calculated from the date of its receipt of that information, in which to make its decision.
It is immediately obvious from this rule that SARS is granted very liberal time in which to consider objections.Secondly,and most importantly, SARS does not suffer any consequences for failing to comply with these time periods.It is the taxpayer who will be obliged to incur the costs of seeking an appropriate order from the High Court, compelling SARS to attend to the objection.In the most likely event that SARS disallows the objection, the taxpayer may still have to face the possible legal costs of employing a representative to appear at subsequent hearing before the tax board, or the tax court.
Should any taxpayer fail to comply with the various provisions of either the income tax, or the VAT Act, they face the automatic imposition of penalties and interest.On the other hand,SARS faces no penalties for its failure to comply with the time periods.The advent of a constitutional democracy appears to have done little to persuade SARS to respect the basic right of all taxpayers; to provide fair and reasonable administrative action.
The time has arrived for taxpayers, and their various representatives, to insist that amendments that will address this situation are legislated.If SARS faces the possibility that the failure to act within a prescribed time period will result in the automatic cancellation of the offending assessment, maybe taxpayers will receive the service the revenue authority boasts about.
Source: By Alan Lewis (TaxTALK)