INFLUENCE TO BE STRENGTHENED
During October 2015, the University of Johannesburg hosted a round table discussion with the Tax Ombud, Judge Bernard Ngoepe, and leading industry tax specialists, addressing challenges. The key takeaway from this event was that further legislative amendments are required to further strengthen the influence of the Office.
It is encouraging to note that further legislative amendments are proposed by the 2016 Draft Tax Administration Laws Amendment Bill, published for public comment. The proposed amendments are as follows:
- Power of the Minister to appoint the Tax Ombud: Currently the term of the office of the Tax Ombud is three years. The proposed amendment aims to enhance the independence of the Tax Ombud by extending his/her tenure to a five-year term.
- Office of the Tax Ombud: 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. The proposed amendment aims to enhance the independence of the Tax Ombud in respect of the appointment of the staff of the Office of the Tax Ombud allowing for the staff to be appointed by the Tax Ombud. In addition, an amendment is proposed that although the expenditure connected with the functions of the office of the Tax Ombud is paid out of the funds of SARS, it is subject to a budget for the office approved by the Minister.
- Mandate of the Office: Currently the Tax Ombud cannot initiate an investigation without a complaint. The proposed amendment aims to extend the mandate of the Tax Ombud to include the investigation and review, at the request of the Minister, of any systemic issue related to a service matter; the application of the provisions of the Tax Administration Act; or procedural or administrative provisions of a Tax Act.
- Resolution and recommendations: The Tax Ombud’s recommendations are not binding on taxpayers or SARS. The proposed amendment aims to enhance the effectiveness of the Tax Ombud’s recommendations. If SARS or the taxpayer does not accept them, reasons must be provided. This will ensure that the Tax Ombud is able to review the reasonableness of the reasons to inform future action.
Other areas where the proposed amendments fall short:
- Mandate of the Office: The Tax Ombud should have the power to award costs to taxpayers. Further, the office should also have the power to suspend SARS’ actions while complaints are investigated.
- Reports by the Tax Ombud: 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.
The proposed amendments must still follow the public consultation process before being enacted. Written and oral presentations will be considered by the Standing Committee on Finance in Parliament. National Treasury, to fully understand the written and oral presentations, normally schedule a series of workshops with key stakeholders. A response document will then be issued by National Treasury based on report-back hearings to the Standing Committee on Finance in Parliament. Thereafter the Bill will be enacted.
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.
Author: Muneer Hassan CA(SA) is a Tax Consultant and a Senior Lecturer in Taxation at UJ