Experts applaud Sars changes
The SA Revenue Service has responded to complaints about delays in its dispute resolution processes.
The SA Revenue Service has responded to complaints about delays in its dispute resolution processes but now some say the changes may have created more problems.
Tax experts have welcomed improvements to the Sars dispute resolution process but say procedural rule changes for disputes that are submitted late may create more problems than they solve.
The changes, which include the implementation of an electronic request for reasons for an assessment and a request for suspension of payments pending the outcome of a dispute on VAT via e-filing, were introduced on Friday.
More time
Patricia Williams, a partner at Bowmans, says taxpayers may normally request Sars to provide them with the reasons for an assessment. If such a request was submitted, a taxpayer had 30 business days to lodge an objection after receiving the reasons, instead of the normal 30 business days after receiving the assessment.
But because a request for reasons couldn’t previously be submitted via the e-filing system, tax practitioners often had difficulty obtaining the reasons and proving that it was submitted. Once the reasons were provided and taxpayers lodged an objection, the Sars system often flagged it incorrectly as a late objection.
The electronic format should address this problem, Williams says.
Elle-Sarah Rossato, associate director at KPMG, says although electronic communication is more efficient, not all taxpayers have access. Sometimes taxpayers’ contact details are incorrect.
“Contacting the Sars contact centre is also time-consuming and sometimes inefficient. We have found that a simple request for reasons of an assessment to Sars rarely gets answered. Therefore, having the facility available on e-filing should create a platform to more easily direct these requests to Sars,” she says.
The change to allow for the electronic suspension of payments pending the outcome of a VAT dispute is also a positive development.
“The fact that it is now available on e-filing is a good thing. There will be a formal record and it won’t just disappear.”
Williams says the request for reasons and suspension of payments on VAT are long overdue.
But the change in relation to late submission of a dispute for personal income tax, corporate income tax or VAT could create challenges, she says.
Sars says the new dispute management process will introduce a separate condonation workflow whereby the taxpayer will be allowed to submit the request for reasons, notice of objection or notice of appeal after the periods prescribed. Previously, the condonation process was included in the actual dispute process.
That caused confusion regarding outcomes and the next step to be taken in the dispute process.
The new process allows Sars to attend to the request for late submission immediately. The taxpayer will be prompted to provide reasons for the lateness. Sars will inform the taxpayer upfront that the submission is late instead of classifying the dispute as invalid.
Separation anxiety
“Separating the reasons for your late submission from your actual submission is problematic given that the merits of your submission are critical in terms of our case law,” Williams argues.
Due to the intertwined nature of the issues, it doesn’t make sense to separate it from a legal perspective, Williams says.