The Receiver of Revenue plans to introduce a new dispute resolution process, and has set up an office to deal with service complaints.
The South African Revenue Service (SARS) is getting its house in order and putting on a more taxpayer- friendly face.
This week it unveiled draft plans for a new dispute resolution process aimed at making it easier for taxpayers to challenge their tax assessments.
In addition, at the beginning of last month, SARS set up a Service Monitoring Office for taxpayers who are unhappy with the service they receive from SARS.
Taxpayers will be able to use the dispute resolution process to take up complaints related to the grounds on which they are deemed liable for tax, the amount of tax for which they are liable, and how tax legislation is applied to them.
The new process, which is likely to be introduced in March next year, is a revamp of the old objection and appeal procedures. It is an attempt to address taxpayers' complaints that these procedures took too long - sometimes years - to resolve disputes. The new process is governed by rules that include time limits within which both you, the taxpayer, and SARS must act.
The new rules also provide for an alternative dispute resolution process, which could save you costly and time-consuming court appeals against a decision made by SARS.
While the dispute resolution process deals with issues you have with your assessment, the Service Monitoring Office, on the other hand, can be used to take up complaints about SARS's service. These complaints could include the failure by a SARS office to answer a telephone or to respond to a request, or even the attitude of a SARS employee.
The office will be headed by Professor Lynette Olivier, the director of the Centre for Comparative Tax Studies at Rand Afrikaans University. It will function independently of SARS branches and will report directly to Pravin Gordhan, the head of SARS.
In terms of the proposed dispute resolution rules, if you are aggrieved by an assessment, you can ask SARS to supply you with the reasons why it arrived at that assessment. You must, however, do so within 30 days of receiving the assessment.
SARS may then, within 30 days, notify you that you have already been given adequate reasons - reasons are usually supplied when SARS arrives at a different assessment to the one that you submit - and refer you to the relevant documents.
Or, if you have not already been given adequate reasons, SARS must supply you with these within 60 days of your request, unless there are exceptional circumstances or the matter is complex. In this case, SARS must inform you that you will receive the reasons within 45 days after the initial 60 days.
Lodging an objection
If, after receiving the reasons for the assessment, you still do not agree with it, you have 30 days in which to lodge an objection. Within 90 days of receiving your objection, SARS must inform you whether or not it will entertain your objection and, if so, whether it is going to change or withdraw your assessment.
If SARS needs further information to decide on your objection, it must, within 60 days of receiving the objection, ask you to provide this information or documents. Within 60 days of receiving this information, you must be given an answer on your objection.
If SARS needs more time, because there are exceptional circumstances or the matter is complex, you will be informed and the delay may not exceed a further 60 or 90 days, depending on the original deadline applied.
If, after lodging an objection you are still not happy, you can, within 30 days of the decision on your objection, appeal against that decision.
When you appeal, you can indicate that you wish to make use of alternative dispute resolution procedures, or SARS may suggest that you do so. In terms of these alternative proceedings, a person will be appointed to facilitate, and you and SARS representatives will meet in an attempt to come to an agreement on the issue. The facilitator will be a SARS employee with a good knowledge of tax law and mediation or arbitration skills.
Alternative dispute resolution processes can be cheaper than taking the matter to court, because you do not have to have legal representation, although you can choose to, and issues can be resolved quicker because there are time limits.
These proceedings must not take more than 90 days after SARS received notice of your intention to appeal. The matter must be settled by means of a written agreement.
If you do not come to an agreement, the person appointed to facilitate the proceedings may be asked to make a recommendation and this recommendation may be used in later proceedings, including court proceedings.
Cases that will not be settled
SARS will not settle a matter through the alternative dispute resolution processes if:
- The dispute relates to intentional tax evasion or fraud;
- The settlement would be contrary to law or established SARS practice;
- There is public interest in judicial clarification of the issue;
- Pursuing the matter in court will promote compliance with the law; or
- You have not complied with the law and your non-compliance is of a serious nature, such as tax evasion.
If the alternative dispute resolution process fails, or is not open to you, an appeal can be heard by the Special Tax Court or an appeal board, a statutory body that can only hear matters involving amounts of R100 000 or less.
If your appeal goes to the board, you must be told when and where the appeal will be heard within 40 days of SARS receiving notice of your intention to appeal.
You must be given a decision within 30 days of the appeal hearing.
Other rules have also been introduced to bring Special Tax Court procedures in line with those in the High Court rather than those in the Magistrate's Court, which has been used up until now.
These procedures enable you to limit the issues in dispute for the purposes of litigation and deal with such as a pre-trial conference, the use of expert witnesses, the payment of witnesses and so on.