How does the Tax Ombud fit into what already exists?
The Tax Administration Act, 2011 (the Act) seeks to consolidate the administrative and procedural provisions of the various tax laws into a single Act. It seeks to promote a better balance between the powers and duties of SARS on the one hand, and the rights and obligations of taxpayers on the other. The objective was simple; to make sure the relationship between SARS and taxpayers is more equitable, transparent and fair.
The creation of an independent and impartial Tax Ombud is a critical part of achieving a balance of power within tax administration. The independent and impartial nature of the Tax Ombud becomes clear when we look at ways in which taxpayers can attempt to resolve administrative, procedural and service related complaints against SARS. In pursuance of resolving a complaint, the Tax Ombud conducts an independent assessment of what happened and also ensures that there are proper checks and balances.
When to complain?
When the taxpayer is aggrieved with SARS in respect of something that SARS has done or failed to do.
1) Administrative, Procedural and Service complaint:
- Lodged with SARS:
A taxpayer should first seek to resolve a complaint directly with SARS or, if dissatisfied with the outcome, escalate the matter to the SARS Complaints Management Office (CMO) by calling the CMO on 0860 12 12 16 or by lodging a complaint via eFiling. See how to lodge a complaint for more info.
- Lodged with the Tax Ombud:
Section 16 of the Act sets out the scope of the mandate of the Tax Ombud, which is to:
- Review and address complaints from taxpayers regarding a service, procedural or administrative matter arising from the application of the provisions of a tax Act by SARS.
- Review at the request of the Minister or at the initiative of the Tax Ombud with the Minister’s approval any systemic/emerging issue relating to service matters or the application of this Act or procedural/administrative provisions of a tax Act.
- In fulfilling his responsibility, the Tax Ombud must review a complaint and resolve it through mediation or conciliation.
- Must act independently in resolving a complaint.
- Additionally, follow informal, fair and cost-effective procedures to resolve a complaint.
- The Act places a duty on the Tax Ombud to provide information to taxpayers about the mandate of the Tax Ombud and the procedures to pursue a complaint.
- To facilitate access by taxpayers to complaint resolution mechanisms within SARS to address complaints before the taxpayer approaches the office of the Tax Ombud.
- Identify and review systemic and emerging issues related to service matters or the application of the provisions of the Act or procedural or administrative provisions of a tax Act that impacts negatively on taxpayers.
- Section 18(1) authorises the Tax Ombud to review any complaint falling within his mandate when receives a request from a taxpayer to do so.
- Section 18(2) affords the Tax Ombud a discretion to determine, independently of SARS, how a review is to be conducted and whether a review should be terminated before completion.
- In exercising the discretion afforded to him, the Tax Ombud is required to consider various factors stated in section 18(3).
- Section 18(4) provides that the Tax Ombud may only review a complaint if the taxpayer has exhausted the internal complaint resolution mechanisms within SARS, unless there are compelling circumstances for not doing so. In determining if compelling circumstances exists in terms of section
- 18(5), the Tax Ombud must consider factors such as whether ”:
- The request raises systemic issues.
- Exhausting the complaints resolution mechanisms will cause undue hardship to the requester.
- Exhausting the complaints resolution mechanisms is unlikely to produce a result within a period of time that the Tax Ombud considers reasonable.
- Section 18(6) of the Act requires that the Tax Ombud inform the requester of the results of the review or any action taken in response to the request, but at the time and in the manner chosen by the Tax Ombud.
- In terms of section 20 (1), the Tax Ombud is obliged to attempt to resolve all complaints falling within his mandate at the level at which they can be efficiently and effectively dealt with and must in so doing communicate with SARS officials identified by SARS.
o Section 20(2) of the act states that The tax Ombud’s recommendations are not binding on a taxpayer or SARS, but if not accepted by a taxpayer or SARS, reasons for such decisions must be provided to the Tax Ombud within 30 days of notification of the recommendations and may be included by the Tax Ombud in a report to the Minister or the Commissioner under section 19.
- Lodged with the Public Protector (PP):
If a taxpayer remains dissatisfied with a matter after having exhausted the SARS internal complaints process and the Tax Ombud complaints resolution mechanism, the taxpayer may lodge a complaint with the PP. Nothing stops a taxpayer from lodging a complaint with the PP from the outset, but it is anticipated that most matters would be resolved at SARS or the Tax Ombud before following the more protracted process at the PP where the necessary tax administration expertise may be less accessible.
Matters handled by the PP include: Maladministration; dishonesty or improper dealings with respect to public money; improper enrichment; receipt of improper advantage; improper prejudice as a result of: abuse of power / unfair, capricious, discourteous or other improper conduct / undue delay / violation of a human right / other decision taken or situation brought about by public authorities.
2) Legal Disputes on the interpretation of tax laws:
Taxpayers may dispute the application of the law by SARS by using the process of objections and appeals. An objection and appeal may be lodged against an assessment or decision that is specifically made subject to objection and appeal in a tax Act.
A taxpayer who is aggrieved by an assessment may object to the assessment.
- Decisions subject to objection and appeal which include:
- A taxpayer may object to a decision of SARS for not extending the period for lodging an objection;
- A taxpayer may object to a decision of SARS for not extending the period for lodging an appeal;
- and any other decision that may be objected to or appealed against under a tax Act.
A taxpayer who is aggrieved by SARS’ decision to disallow an objection to an assessment/decision may appeal against the disallowance to the Tax Board or Tax Court, or by mutual agreement with SARS, may try to solve the dispute through the Alternative Dispute Resolution (ADR) process.
- Redress through higher Courts – Taxpayer Litigation:
A taxpayer may approach a High Court for any other dispute, except for those stated in above.