SARS have a responsibility to fairly administer a range of tax laws so as to ensure that taxpayers comply with their obligations.

Part of SARS’s role is to help taxpayers understand their rights and responsibilities in relation to the laws it administers, and to do that by offering advice and guidance that gives their view of how the law applies. It often happen that taxpayers disagree with the SARS’ interpretation and ultimately it is the courts that have the final say in determining what the laws mean.

It is important that a level playing field be achieved for SARS and taxpayers in accordance with the legislative intent. SARS makes decisions daily based on its view of the law that taxpayers sometimes disagree with. In these circumstances taxpayers have a right to object and if appealed, be referred to the Tax Courts, albeit at the taxpayer’s expense.

There are however certain issues where it is in the public interest to have the law clarified through litigation. Currently it is only taxpayers that are willing to commence with such litigation. Under the test case litigation program in Australia, the Australian Tax Office (ATO) provides financial assistance to taxpayers whose litigation is likely to be important to the administration of Australia’s revenue and superannuation systems. The aim of the program is to develop legal precedent – that is, legal decisions that provide guiding principles on how specific provisions we administer should be applied more broadly.

The ATO is guided in the decision to fund such cases by set criteria and a test case litigation panel. The panel includes members of the accounting and legal professions, to ensure that the ATO funds issues of importance to the community.

South Africa should investigate this possibility to improve the tax administration and tax morality of taxpayers.

Yours truly,
Stiaan Klue

SARS announced that from 1 March 2010 all taxpayers who use their personal vehicles for business travel will be required to complete a logbook separating business travel mileage from that of private travel mileage in order to claim travel expenses.

The complexity of a tax system may in some instances result in the fiscus receiving amounts of tax that may not be legally due. One instance in which this may arise is when a JSE listed company buys back its own shares through the JSE.

Does the Commissioner have the right to enact his own legislation, thereby bypassing Parliament? Looking at s 76P of the Income Tax Act (the Act), it appears as though he does – but is this acceptable in a democratic society?

Employers submitting their monthly declarations (EMP201s) to the South African Revenue Service will be required to do so using a new EMP201 form for the March declaration, due on 7 April.

SARS released a draft interpretation note dealing with section 39(7)(a) of the VAT Act.

This ruling deals with the income tax implications for the land owner and the developer relating to the establishment of a residential township development (improvements) in terms of lease agreements.

Swiss bank UBS is pressing Swiss lawmakers to endorse a deal settling tax evasion litigation with the United States, warning that 20 other Swiss banks could be targeted if it fell through.