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Tax Ombud’s term extended: what are his plans?

‘I’m busy trying to … have the Act amended to give the office its full independence,’ says Judge Bernard Ngoepe.

NOMPU SIZIBA: Earlier this month it was announced that Judge Bernard Ngoepe had his terms as the tax ombud extended by three years, effective from October 1 2019, by finance minister Tito Mboweni. The office of the tax ombud is there to function independently of the South African Revenue Service, and take on the grievances of the taxpaying public in instances where they’ve exhausted speaking to Sars through the channels made available to them.

So, has the office of the tax ombud managed to retain its independence since it was established in October 2013, and what can we expect over the next three years? I’m joined on the line by Judge Bernard Ngoepe, the tax ombud. Thanks very much, Judge, for joining us. You been the head of the office of the tax ombud since it started in 2013. Just tell us about the work of your office , its evolution from when you started to where you feel it is now.

JUDGE BERNARD NGOEPE: Well, yes, it’s about three people. Eventually of course it’s proved ……[58.6] and I think the staff is about 40-something. Essentially, what we are still doing is to accept complaints which people may have against Sars for something – that they were not treated fairly, they have to [1:13]…… on the same documents they submit and be on time. Or again, they go to the office and stand in a queue the whole day, and at the end of the day they are told “come tomorrow”. All sorts of things.

We look into those complaints, we investigate them, we engage Sars for some explanations, and we make sure that people generally are ……[1:38]

NOMPU SIZIBA: In terms of the composition of your staff, do any of them come from Sars?

JUDGE BERNARD NGOEPE: Well, we there were some …… who after those …… established have essentially migrated from Sars to the new office, because it was really a new office. But there were those who recruited people from outside. And, modesty aside, I’m always proud of the people that we recruited because we really, really get people who are tax experts. The type of people who are in positions, whose minimum qualification is a BCom, to the likes of people who have specialist post-graduate qualifications in tax, real tax specialists who would be able to go toe-to-toe with Sars people to say, “Sars, you are wrong; the Tax Administration Act is not applied this way, this is not how you should tax a widow, not how you should tax a farmer……” This is how we should tax the former, what you should do,” and so forth. So, we do have that kind of speciality in that office. It is a specialised office – tax, and nothing else but tax.

NOMPU SIZIBA: You are meant to be totally independent of Sars, and call them out where they haven’t done right by the taxpayer, as you’ve told us. How have you managed to strike that balance, as no doubt you also need to work with Sars?

JUDGE BERNARD NGOEPE: Yes, we need to work with Sars, but I think we both understand our limits. I respect their turf, and they respect mine as well. They haven’t indicated that they don’t respect my turf, but what it [3:17]….. is very important. We need to be independent of Sars and actually be seen to be independent of Sars. And, ever since my appointment I’ve found that, from the beginning, the office was to some extent very dependent on Sars. I had to try and work a situation where we would be less and less dependent on Sars – for example, financially.

But I must tell you that I haven’t got the office to where it should ideally be because, to get it there, we need to amend the Act here and there – which we did in some instances, but I’m still not happy. It’s not independent enough structurally. I’ve been trying to engage the ministers with very little success.

Now I’m busy trying to engage the current minister to try and have the Act amended to give the office its full independence. But, I must tell you, I’m not happy with the progress that I am having, because I’m not enjoying nearly as much cooperation as I should have from the ministry.

NOMPU SIZIBA: Well, let’s hope that improves going forward. Just remind us, what is the financial arrangement for you – how are you funded?

JUDGE BERNARD NGOEPE: It’s a very awkward situation. We don’t get our own budget directly. Our budget is contained within the Sars budget. In the past, Sars would actually decide how much to give my office. I complained about that, because I felt that exercising some kind of oversight where Sars itself can’t be saying how much to give my office.

But the minister, Mr Nene, understood that. Then I said it should be the minister who must decide how much the office should get. He agreed to that arrangement. He decided to determine how much my office should get, and then to use the word, [? 5:24]re-send that money which Sars would not appropriate itself. When the money for my office is determined by the minister, Sars will not touch it for their own office. It will be used by only my office. But that is still not ideal.

NOMPU SIZIBA: Yes, I do understand what you are saying. Minister Mboweni indicates that he has given you an addition three-year term, and it’s going to be on a part-time basis. What does that mean, exactly, and what impact or effect will that have on the office, if at all?

JUDGE BERNARD NGOEPE: Well, actually it has always been on a part-time basis from the beginning – remember the last year of my retirement, to start up this office. We didn’t exist. and I thought we agreed then with the then minister Gordhan that, well, I give two days of my week towards setting up this office. But then the office grew and grew – I had to increase the number of days, but still not yet on full-time basis.

But then we managed to get a chief executive officer, a very competent chief executive officer, who obviously was going to be on a full-time basis. But I’m there to determine policy; I’m there to assist the office, to direct which way to go, and so forth and so on, and I interact with parliament directly. I submit reports to parliament directly. I go to parliament, addressing the relevant portfolio committee, and so on and so forth. That’s how I’ve been functioning all these years.

NOMPU SIZIBA: Judge, we know that in recent years tax compliance has slid somewhat, and there are a number of reasons for that. What has you office been doing to ensure greater compliance, and are you confident that, with the changes at Sars, compliance more broadly will improve?

JUDGE BERNARD NGOEPE: I assume the question is referring to the context in which I’m affecting Sars. We have had some queries with Sars. Time and again, of course, we do have some queries with Sars, naturally, and we do make recommendations to Sars which Sars then has to implement. In the past, when my desk is quiet, I managed to persuade parliament to change the Act, to say where Sars are not implementing my recommendations, they must give reasons. That improved the situation greatly. But, happily, most of the recommendations that my office then makes, Sars complies with. There are some instances where we are not entirely happy, where there is room for improvement – but the situation is satisfactory.

We’ve also taken up Sars on issues where people complained that Sars employs delaying tactics in paying them the refund, which has been certified to be due. I conducted a special investigation into that, and …… that no …… complaints were justified. We tackled them with Sars and they undertook to improve the situation. We’ll see how far they will honour that undertaking.

But signs are encouraging. You know, in life when you solve one problem, another one comes up. That’s part of life. New challenges, as we go along, and so forth, but I would like this office to be structurally fairly sound and independent, so that when I leave the office it can continue to exist beyond myself and beyond everyone else.

NOMPU SIZIBA: Our thanks to Judge Bernard Ngoepe, the tax ombud.

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