Following the campaign launched by the Office of the Tax Ombud in September, there has been much focus on taxpayers’ rights. Moneyweb receives many heart-rending emails from distraught taxpayers about the problems they are experiencing with the South African Revenue Service (Sars).
The Tax Ombud can only assist a taxpayer if it concerns a systemic issue with Sars, hence, for those taxpayers who cannot afford a tax practitioner, or for those who cannot afford the legal costs of litigation, they are left up the creek without a paddle.
It is to be noted that “inaction” by Sars can also be taken on review. But the taxpayer must be willing (and able) to fork out the costs of litigation.
Moneyweb asks questions …
On September 17, the Sars media team was advised that Moneyweb would be writing a couple of articles on taxpayers’ rights following on from the launch of the #taxpayersrightsmatter campaign, and submitted the following questions:
1. Sars appears to be directing all its efforts on the existing tax base, which is becoming smaller. In my view, Sars officials will be under more and more pressure to increase tax collections, which will lead to errant behaviour. Do you have any views on this?
2. Is the focus on [getting] existing taxpayers to pay more, or is Sars doing enough to get non-paying people/companies to actually pay tax?
3. Following on the heels of [the Moneyweb article about] SIP [Project Managers] versus Sars, in which the court found that Sars had abused its wide powers of debt recovery, is yet [a] further example, WPD Fleetmas versus Sars. May I please have your comment on this case.
4. A recent article, Sars, have you taxed that Aston Martin?, resulted in many [reader] comments, for example:
- ‘Sars could assist the seemingly hamstrung NPA [National Prosecuting Authority] by doing lifestyle audits which are not as politically sensitive to instigate.’
- ‘Until such times as all parties are treated equally, Sars will have little respect.’
- ‘Sars will bust your balls over a dispute on travel allowance – but ignore the corrupt cadres.’
After a number of emails from Sars media requesting extension, Sars has not replied.
The Covid-19 disaster will no doubt have a devastating impact of taxpayer rights, as they struggle to get answers and assistance from Sars, where a large portion of their staff are ‘working’ from home.
WPD Fleetmas versus Sars
Following on the heels of the Moneyweb article in which the court found that Sars had abused its wide powers of debt recovery, is yet another appalling example – WPD Fleetmas versus Sars.
Whereas Sars may issue a third party notice requiring another party to pay the taxpayer’s outstanding debts, it has to tick a few boxes before it does so.
Before Sars issues a third party notice, it must issue a final demand to the taxpayer.
Sars said that it had, but luckily (as in the SIP Project Managers matter), the taxpayer had taken a screen grab indicating that Sars had not done so.
Is there is a technical fault in the Sars eFiling system in that electronic notices generated by Sars can at times go awol?
One wouldn’t want to conclude that a Sars official would generate this eFiling notice as ‘proof’ at a later stage.
Disturbingly, this is the second time that a court has concluded that a Sars system-generated mail did not appear on a taxpayer’s eFiling profile. How many other instances are there?
The court declared Sars’s action to be “unlawful and therefore also null and void”.
Sars has to repay R6.3 million plus interest to WPF Fleetmas.
When an employer deducts PAYE and doesn’t pay it over to Sars
Surely Sars has the technology to track the monthly receipt of pay-as-you-earn (PAYE) payments from employers, and shouldn’t wait for the taxpayer filing season to harass the hapless employee who had absolutely no idea that the PAYE was not being paid over?
If Sars is not able to manage the agency relationship with employers, perhaps this should change.
From one distraught employee: “My previous employer has not issued me with an IRP 5 for the 2020 tax year … they are not returning my phone calls or emails … I logged a case with Sars via email but Sars is not responding to it …” Later, the Call Centre said Sars could not resolve the problem.
“I wish we had more rights (not power, just human rights).”
Inordinate delay in Vat registrations
Received from a taxpayer in August: “Sars is becoming more and more difficult to deal with. I am currently trying to register my company for Vat [value-added tax]. After five visits I am a little closer but not there yet. Frustrating to say the least.”
Received from taxpayer in October: “We have still not sorted our Vat registration out after over six months of trying. I am not the only person in this situation, I know of more companies with the same complaint … You ask them a question and they “escalate it with an answer due in 21 days”. The same exercise is then repeated several times.”
The South African Institute of Tax Professionals (Sait) has also identified problems experienced with Vat registrations, and has escalated the matter to Sars.
Does Sars perhaps have an underhand reason for the reluctance to register start-ups for Vat? Or is it merely inefficiency?