Tax Administration Act signed into law
08 August 2012
Posted by: SAIT Technical
By SARS Practitioner Connect
The Tax Administration Bill was promulgated into law as Act 28 of 2011 in GovernmentGazette 35491 of 4 July 2012. In terms of section 272 of the Act, the Act will come intooperation on a date to be determined by the President by proclamation in the Gazette.SARS's preparations for the implementation of the Act are at an advanced stage and itanticipated that it will come into operation within the next three months.
The Act is intended to simplify and provide greater coherence in South African taxadministration law. It eliminates duplication, removes redundant requirements and alignsdisparate requirements that currently exist in different tax Acts ranging in age from 4 to 63years old. It creates a single, modern framework for the common administrative provisionsof the tax Acts.
Most taxpayers are compliant and the Act should ensure better service and a lowercompliance cost for them. SARS is, however, duty bound to actively pursue tax evaders in order to maintain compliant taxpayers' confidence in the integrity of the tax system.
Some key features of the Act are:
A phased move to a single registration process and number across taxes, to reducered tape and streamline the system, and self-assessment of taxes, so taxpayers neednot wait for a SARS assessment;
Greater access to third party data, to underpin SARS initiatives such as the prepopulationof individual tax returns;
Clearer rules on SARS access to information, so tax liabilities can be determined more quickly and accurately;
The ability to search business premises without a warrant in narrowly defined situations where the general requirement for a warrant would defeat the object ofthe search, so SARS can act when tax is at serious risk and time is of the essence;
Clear requirements and timelines for the issue of tax clearance certificates, to
provide greater certainty and responsiveness to business;
Feedback on audit progress and findings, to engage more fully with taxpayers andensure they understand the reasons for any adjustments;
Specific timeframes for decisions of the Tax Board (a "small claims court” for tax) andwider reporting of Tax Court decisions, to improve access to justice; and
The appointment of a Tax Ombud, informed by international experience, to provide taxpayers with a low cost mechanism to address administrative issues that could not
be resolved through SARS's normal channels.
Although the Act provides for a year from its commencement for the appointment of theTax Ombud, the Minister of Finance announced in his 2012 Budget Speech that the Tax Ombud will be appointed this year.The Act benefitted from two rounds of public consultation in 2009 and 2010, while in draft form, as well as the thorough Parliamentary process that followed its introduction by the Minister of Finance on 23 June 2011.