A few examples are:

• There are delays in dealing with correspondence from taxpayers and taxpayer representatives resulting in taxpayers and their representatives having to follow up and submit complaints to SARS.
• SARS does not adhere to timeframes in respect of dispute resolution, resulting in long delays for resolution of even uncomplicated disputes despite legislated timeframes for SARS to deal with disputes.
• SARS does not deal with suspension of payment requests where assessments are disputed, resulting in SARS instituting debt collection without dealing with the request for suspension of payment.
• SARS raising additional assessments without fully informing taxpayers of the reasons for additional assessments.
• Tax compliance status being denied in instances where the taxpayer is actually compliant. The taxpayer is in such instances required to challenge this status with SARS.
• Prolonged SARS audits.
• Manual dispute process for trusts, which means that the disputes cannot be done on efiling.

Below is a summary highlighting some of the primary aspects of SARS’s commitment but not all. The complete Service Charter is available on the SARS website.

Service Area	Commitment by SARS
Returns	To be assessed in under 5 seconds.
Customs Declarations	To finalise 8 out of 10 Customs declarations within 4 hours of receipt.
Verifications	To conclude 7 out of 10 verifications of self -assessed return within 21 business days and 90 business days for multiple years.
Audits	To conclude 8 out of 10 audits within 90 business days and to provide progress reports as per the Tax Administration Act.
Refunds	To pay 9 out of 10 taxpayers refunds due within 72 hours.
Payments	To process 9 out of 10 payments within 3 business days of receipt.
Suspension of Payment	To communicate decisions in 6 out of 10 valid requests within 30 business days of receipt. SARS has committed to not instituting collection steps from the date it received a valid request up until 10 days after the taxpayer has been informed that the request has been declined.
Disputes	Provide reasons in 9 out of 10 cases within 45 business days. Make a decision in 7 out of 10 objections within 60 business days from the date of lodging an objection. Finalise 5 out of 10 ADR proceedings with 90 business days from the commencement of the ADR.

 

Although SARS has committed to improving its turnaround times on the various service areas and a step in the right direction, it faces some critical pitfalls at the very least.

Although SARS is moving toward an efficient digital platform service offering, some functionalities do not always speak well to each other. Although SARS has committed to improving its turnaround time on the outcome of suspension of payments requests, some problems are likely to still arise. Furthermore, it is important to note that SARS is prohibited from instituting any legal steps until the expiry of the 10-day notice period.

It also creates the impression that SARS does not hold itself equally accountable for its obligations under the various Tax Acts and Regulations administered under its supervision as it would taxpayers. For example, the Dispute Resolution Rules are very specific regarding the time frames for disputes within which SARS has to respond. It is not an opt-in or opt-out approach. SARS must abide by the law and respond within the stipulated timeframes so as to be treated equally as taxpayers who are required to ensure compliance with the various time frames in order for SARS to consider the disputes submitted.

SARS hold taxpayers to a high standard when it comes to compliance with the various Tax Acts which places certain obligations and responsibilities on taxpayers. However the same Tax Acts also places various responsibilities and obligations on SARS who should equally comply with such provisions and not resort to a level of satisfaction such as 5 out of 6 cases approach as is proposed in the Charter.

Furthermore, the Service Charter does not fully address SARS’s commitment to assisting taxpayers and addressing time frames with much more complex issues.

Author:

Delecia Venter
Tax Manager
PKF Port Elizabeth
delecia.venter@pkf.co.za

No information provided herein may in any way be construed as legal and/or tax advice. Professional advice should be sought with reference to specific background facts before any action is taken based on the information contained herein. We hereby disclaim any responsibility should any person act upon the contents of this publication without due consultation.

PKF South Africa Inc. is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.