Print Page
News & Press: SARS News & Tax Administration

Tax administration in South Africa - Prepare for change

Monday, 31 October 2011   (0 Comments)
Posted by: SAIT Technical
Share |

Tax administration in South Africa – prepare for Change

PWC Synopsis - RC Williams

The Tax Administration Bill (Bill No. 11 of 2011) was introducedinto Parliament on 23 June 2011. It proposes the consolidationin a single statute of the law relating to the administration of the majority of the taxes administered by SARS.

Objection and appeal under the Tax Administration Act

A taxpayer’s right to object to an assessment and appeal to the Tax Board or the Tax Court if the objection is disallowed is the lynchpin of taxpayers’ rightsunder fiscal legislation.

The problem is that the objection and appeal provisions of the Income Tax Act,for example, have been scattered throughout the Act, although an effort hasbeen made to collate them into section 3(4). A second problem has beenuncertainty as to whether "decisions” by the Commissioner which impactadversely on the taxpayer, can be the subject of objection and appeal.

The Tax Administration Bill, which may be enacted in the near future,addresses both of these problems.Simultaneously with the coming into force of the Tax Administration Act,almost all the objection and appeal provisions of the Income Tax Act will bedeleted in the latter Act and relocated to the Tax Administration Act, section104(1) of which will state that any taxpayer who is aggrieved by anassessment is entitled to object to it.Section 104(2) goes on to stipulate which "decisions” by the Commissioner (asdistinct from assessments) can be the subject of objection and appeal.

These comprise a decision not to extend the period for lodging an objection, adecision not to extend the period for lodging an appeal, a decision not toauthorise a refund, and "any other decision that may be objected to orappealed against under a tax Act”.

A challenge to the merits of an assessment as distinct from a challenge to fairness and rationality

Objection and appeal is the process whereby a taxpayer challenges anassessment on the merits, in other words, where he argues that the assessmentis based on incorrect facts or wrongly applies the law.

By contrast, disputes as to the fairness and rationality of administrative actionby SARS (which is an argument about due process, as distinct from the merits)may be challenged in terms of the Promotion of Administrative Justice Act 3 of2000.

The Tax Administration Bill draws a clear distinction between an assessment,which it defines in section one as "the determination of the amount of a taxliability or a refund” and a decision by the Commissioner. All assessments canbe challenged by way of objection and appeal, but only a limited range ofdecisions can be so challenged.

However, other decisions by the Commissioner – provided they constituteadministrative action and provided they meet the further criteria forreviewability laid down in section 6 of the Promotion of Administrative JusticeAct, may be brought under judicial review in terms of that Act.

In this regard, as Kriegler J observed in Metcash Trading Ltd v CSARS 2001 (1)SA 1109 (CC) at 1130 –‘[t]he Commissioner is not a judicial officer and assessments and concomitantdecisions by the Commissioner are administrative, not judicial, actions; fromwhich it follows that challenges to such actions before the Special Court [nowcalled the Tax Court] or Board are not appeals in the forensic sense of the word.They are proceedings in terms of a statutory mechanism specially created for there consideration of this particular category of administrative decisions - and appropriate corrective action - by a specialist tribunal.

’The Tax Administration Bill leaves intact the remedy, available to a taxpayer in appropriate circumstances, to challenge the conduct of the Commissionerand his officials in terms of the Promotion of Administrative Justice Act.



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.

  • Tax Practitioner Registration Requirements & FAQ's
  • Rate Our Service

    Membership Management Software Powered by YourMembership  ::  Legal