Prior to the enactment of the constitution, SARS had wide and far-reaching powers in terms of the Income Tax Act (ITA). The constitution resulted in significant changes to the ITA to align SARS powers with taxpayer’s rights. A taxpayer’s charter was published for the first time in 1997. The SARS Service Monitoring Office (SSMO) was launched in 2002 to deal with complaints of an administrative nature encountered by taxpayers (the SSMO has been replaced by the SARS Complaints Management Office). During 2005 the SARS Service Charter was released (currently not available on SARS website). The Tax Administration Act (TAA) took effect on 1 October 2012. One of the objectives of the TAA was to promote a better balance between the powers and duties of SARS and the rights and obligations of taxpayers to make this relationship more transparent. The Office of the Tax Ombud was officially launched in 2014.
In the context of the historical developments, we have therefore come a long way in terms of taxpayer rights.
The objective of the Tax Ombud is to review and address complaints by taxpayers regarding service, procedural or administrative issues relating to their dealings with SARS. Although the Tax Ombud’s recommendations are not binding on taxpayers or SARS, it is evident that SARS takes these recommendations seriously.
The influence of the office will, however, be further strengthened if a numbers of issues can be addressed.
- Independence of the office: Currently the office is funded by SARS and the staff are appointed in terms of the SARS Act and seconded at the request of the Tax Ombud in consultation with the SARS Commissioner. For taxpayers to have full confidence in the system, it would be best if the Office of the Tax Ombud is to be totally independent of SARS.
- Broadening of powers of the Tax Ombud’s office: The Tax Ombud should have the power to award costs to taxpayers. Further, the office should have the power to suspend SARS’ actions while complaints are investigated.
- Annual reporting process: Although the Tax Ombud’s annual report must be tabled in Parliament, there is no clarity as to the process of considering the report. The Standing Committee on Finance should consider the report, as it does with the National Treasury and SARS annual reports.
Author: Muneer Hassan CA(SA) is a Tax Consultant and a Senior Lecturer in Taxation at UJ