Tax ombud report shows taxpayers better understand what the office does
More taxpayers are complaining to the Tax Ombud, and, in an overwhelming 87 percent of cases, the ombud finds in favour of the taxpayer, the annual report of the Office of the Tax Ombud, which was released this week, shows.
In the 12 months to the end of March this year, the ombud’s office received 5 904 queries, of which 2 133 were within its mandate. This is a 130-percent increase in the number of valid complaints compared with the previous oneyear period.
The Tax Ombud’s office was established in October 2013 to ensure that taxpayers are treated fairly. The office deals with service, administrative and procedural matters that arise from the application of tax laws by the South African Revenue Service (SARS).
In the year to March 2016, the office saw a decline in the number of complaints outside its mandate and an increase in those within its mandate, indicating that taxpayers are becoming more aware of the office and what it deals with.
Common complaints include delays in the payment of refunds, the correct dispute-resolution procedures not being followed, payments into the wrong bank accounts and interest being charged on amounts that have already been paid.
The 2015/16 annual report shows that 40 percent of complaints related to tax assessments, 17.5 percent to dispute resolution and 14.9 percent to refunds.
The report also lists the 10 most serious current and emerging issues. The number-one issue was a delay in paying refunds, followed by SARS failing to update banking details and allocating payments incorrectly.
INDEPENDENCE
There are ongoing concerns about the office’s independence.
“We do not report to SARS, and have never reported to SARS. The Tax Ombud is accountable to the Minister of Finance,” the ombud, Judge Bernard Ngoepe, says.
However, the office can appoint employees only after consultation with SARS and it cannot initiate investigations. In addition, the findings of the ombud are not binding on SARS.
“Strengthening the independence of the office of the Tax Ombud is vital and urgent,” Judge Ngoepe said in the report.
The office has made some moves in this regard. A memorandum of understanding with SARS has been drafted that will pave the way for service-level agreements.
Legislative amendments are expected to be passed at the end of this year or early next year, according to chief executive of the Tax Ombud’s office, Advocate Eric Mkhawane. These focus on strengthening the independence of the ombud, and require SARS to provide reasons when it does not accept his findings. They will also allow the ombud to initiate investigations, with the approval of the Minister of Finance.