The Office of the Tax Ombud expects to finalise a study within the next month or two aimed at determining whether it has enough capacity, staff and appropriate expertise.
The ‘Capacity Management Study’, as it is referred to internally, aims to collect concrete data to establish how many team members it requires to deal with the rapidly rising number of complaints it receives. This after its CEO, Eric Mkhawane, admitted previously that the office had been “stretched to the limit”.
Mkhawane doesn’t want to put a number to it ahead of the release of the annual report for the 2017/18 financial year, but says there is still “a significant” increase in the number of complaints.
During the previous financial year, complaints rose 62% to 3 454. Due to budget constraints, the office battled to deal with the rise in complaints during the period.
Asked how the office has responded to these challenges, Mkhawane said it had requested additional funding and received “some of it”. The Capacity Management Study is another initiative it has undertaken.
“We are looking at how long it normally takes for a person to conclude a complaint with the current capacity, [and] whether we are able to meet the demands.”
The office has been appointing staff and is busy with a recruitment drive.
“We are appointing more people, but it may not be sufficient,” he says.
Mkhawane believes the rise in complaints is “more than anything else” a result of greater awareness of the office.
There has been growing concern in the tax industry about a deterioration in tax compliance, declining tax morality and the tax revenue shortfall. President Cyril Ramaphosa in May appointed a commission of inquiry into tax administration and governance at the South African Revenue Service (Sars).
The Tax Ombud has also commissioned professionals to draft a proposed operating model that could enhance the status and independence of the office, something that has been a concern since it was established in 2013.
“We have commissioned people to come up with a proposed model and once that process is finalised it might be that we would come up with legislative proposals to implement that particular model, but we are not yet at the stage where we can draft or submit proposed amendments,” the Tax Ombud, judge Bernard Ngoepe, says.
He says the office has been pushing hard for development of the model. He expects that it will be able to submit a proposal to the Minister of Finance for consideration soon, but it is unclear how long it will take to implement if accepted as consultation with other stakeholders needs to take place.
Ngoepe says ideally the office should become an independent institution under National Treasury. It should also receive its own budget and be held accountable to the relevant authority if necessary.
Although its budget is currently ring-fenced within the general budget of Sars, the Commissioner of Sars is to all intents and purposes the Accounting Officer in respect of the Office of the Tax Ombud. This is despite the fact that the office has to resolve concerns about service and procedural and administrative matters between Sars and taxpayers independently.