On 1 July 2018, the South African Revenue Service (‘SARS’) released a new version of its Service Charter. The release of the Service Charter has been widely welcomed and the timing thereof is optimal, since it coincides with the start of the 2018 tax filing season for individual taxpayers, as well as some senior personnel changes at the Revenue Service.
The Service Charter broadly follows the same layout and order as the sections of the Tax Administration Act and dispute resolution rules and contains service level targets for many legislated administrative matters that directly affect taxpayers. The most notable theme throughout the Service Charter is on SARS’s response time, which has traditionally been a frustration for taxpayers, especially regarding refunds. In terms of the Service Charter, SARS will endeavour to pay refunds (above R100), within seven business days if:
- All obligations have been met and no other debt is due;
- SARS administrative control procedures are adhered to; and
- No inspection, verification or audit is required or has been initiated.
Other welcome proposals are SARS’s endeavour to speedily finalise inspections, audits and verifications as well as providing feedback to taxpayers regarding debt suspension and compromise of tax debts within a reasonable time. If adhered to, this will go a long way in removing the uncertainty and anxiety that often goes along with disputes.
It is however, important to note that as much as the Service Charter is an expression by SARS of expected timelines and the quality of service it wishes to offer taxpayers, the content of the Service Charter does not override legislation and SARS specifically includes this disclaimer. There still appears to be a lack of real substantive rights and recourse mechanisms available to taxpayers. Many of the commitments seem vague and non-committal. The primary dispute resolution options and relief available to taxpayers for disputes with SARS therefore remain the provisions of relevant tax acts, as well as the Office of the Tax Ombud. Although it is recommended that taxpayers familiarise themselves with the contents of the Service Charter, they should be weary if simply relying on the content of the Service Charter and should always ensure that they know what their rights are in terms of legislation.
Taxpayers should also remain hopeful that a taxpayer Bill of Rights is developed over time, as recommended by the Davis Tax Committee in its September 2017 report to the Minister of Finance. In terms of this report, taxpayers should have guaranteed rights that are enforceable and have legal effect, since rights are of no value if they cannot be enforced. Although this appears to be one of the shortcomings of the Service Charter, it could be a preamble to what may ultimately develop into a positive set of rules that promote taxpayer confidence.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or ommissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.