Sars charter shortfalls
The release of the long-awaited South African Revenue Service (Sars) Service Charter has been met with concern and disappointment, but also delight.
According to the charter, Sars will aspire to contribute to the economic and social development of the country; encourage tax, customs and excise compliance; counteract fraud and corruption; commit to a service that is fair, accurate and based on mutual trust and respect; and endeavour to adhere to reasonable timeframes.
Patricia Williams, partner at law firm Bowmans, says the timeframes in the charter are in her view far too easy to achieve. Sars has set itself an extremely low service level, in most instances either only an undertaking to “endeavour” to do something supposed to be an absolute requirement in terms of the law, or a lengthy turnaround time where the law does not provide specific timeframes.
“Framing an obligation as something that Sars should try to do, as opposed to actually doing, is contrary to Sars’s obligations in terms of the constitution and the Promotion of Administrative Justice Act to behave fairly and reasonably,” says Williams.
Sars will endeavour to answer calls within four minutes during peak season, and one minute outside peak season. It will endeavour to contact taxpayers within a week where additional “specialist” support is required. The tax collector will endeavour to respond to a tax, customs or excise query within 21 business days of receipt. Williams raises concerns about urgent matters, saying there should be a priority channel for certain queries, with a response within a day or two.
Ferdie Schneider, head of tax at BDO South Africa, says the timeframes are ambitious given the size of the organisation and the multitude of taxpayers it deals with. He says he is quite satisfied that Sars has “endeavoured” to commit itself to fair and reasonable service.
However, it appears the charter does not address the issue of refunds. It states that if no other debt is due, all obligations have been met, Sars’s control processes have been adhered to and no inspection or audit is required, then Sars endeavours to repay the refund within seven days.
These endeavours are only applicable to the current year’s refunds. “This is not permissible in terms of section 190 of the Tax Administration Act, which says Sars must pay a refund where a taxpayer is entitled to it. In practice, there are often outstanding refunds relating to more than one tax period,” Williams says.