Calls for tax­payer bill of rights in SA

Daily Dispatch - - News - By LINDA ENSOR

THE Davis Tax Com­mit­tee has rec­om­mended South Africa adopt a tax­payer bill of rights‚ to guar­an­tee tax­pay­ers’ rights in their in­ter­ac­tions with the South African Rev­enue Ser­vice (SARS) and to make SARS re­spon­si­ble in its deal­ings with tax­pay­ers.

The bill of rights would reg­u­late the in­ter­ac­tions and ex­pec­ta­tions of the re­la­tion­ship be­tween SARS and tax­pay­ers. It should be made en­force­able and with le­gal ef­fect.

The com­mit­tee deals with a tax­payer bill of rights in its re­port on tax ad­min­is­tra­tion‚ re­leased yes­ter­day.

One of the rights that should be con­tained in the bill should be the right to fi­nal­ity‚ which refers to the right to know the time frames for re­views and au­dits‚ as well as re­sponse times for SARS to ad­dress tax­pay­ers’ queries‚ ob­jec­tions and ap­peals.

“The tax­payer should be given the ben­e­fit of con­clu­sion of the mat­ter where the tax author­ity fails to abide by such time frames‚” the re­port says.

An­other right should be the right to pri­vacy and con­fi­den­tial­ity as well as the right to com­plete‚ acc clear and timely in­for­ma­tion (the right to know)‚ in­clud­ing the right to ex­pla­na­tions and rea­sons for SARS de­ci­sions.

The com­mit­tee also pro­poses the right to pay no more than the cor­rect amount of tax and the right to an im­par­tial re­view in the event of a dis­pute over the amount owed.

It notes that cur­rently SARS “sav­agely” ap­plies the “pay now‚ ar­gue later” prin­ci­ple‚ “re­gard­less of the fact that its con­sti­tu­tion­al­ity has not been tested”.

“The ‘pay now‚ ar­gue later’ rule is‚ how­ever‚ an in­fringe­ment to the right to prop­erty as en­shrined in the con­sti­tu­tion. The main rea­son for the rule is to en­sure that SARS is not out of pocket [put dif­fer­ently‚ that SARS is in the money] dur­ing the process of ap­peal or re­view.

“This rule also has the ef­fect of dis­cour­ag­ing tax­pay­ers from en­gag­ing in ap­peal or re­view pro­cesses against SARS as‚ psy­cho­log­i­cally‚ the tax­payer would have ‘lost’ the money al­ready.”

Tax­pay­ers should also have the right to le­gal rep­re­sen­ta­tion‚ the right to qual­ity ser­vice‚ and the right to a fair and just tax sys­tem‚ the com­mit­tee said.

The com­mit­tee fur­ther rec­om­mended that the tax om­bud be given the power to en­force the tax­payer bill of rights. The tax om­bud should also be given an en­hanced role and pow­ers‚ and the model of its en­gage­ment with SARS should be im­proved to im­prove tax moral­ity and com­pli­ance.

Over time the pow­ers of the om­bud should be ex­tended to pro­pose amend­ments to tax norms.

This would en­able the om­bud to proac­tively par­tic­i­pate in the im­prove­ment of the tax sys­tem‚ and to act as a mediator in a tax al­ter­na­tive dis­pute res­o­lu­tion mech­a­nism.

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