Amend­ments to boost om­bud’s in­de­pen­dence

Weekend Argus (Saturday Edition) - - GOODPUZZLES -

Pro­pos­als aimed at en­hanc­ing the in­de­pen­dence and ef­fec­tive­ness of the Tax Om­bud have been in­cluded in the draft Tax Ad­min­is­tra­tion Laws Amend­ment Bill, which was pub­lished for pub­lic com­ment this week.

The pro­posed amend­ments to the Tax Ad­min­is­tra­tion Act pro­vide for:

• The Tax Om­bud to be ap­pointed for a term of five, in­stead of three, years. The term may be re­newed, as is cur­rently the case. Judge Bernard Ngoepe told Per­sonal Fi­nance that his of­fice’s re­quest for the term to be ex­tended was based on a study of sim­i­lar in­sti­tu­tions within and out­side South Africa, which found that, in most cases, om­buds were ap­pointed for five years. The longer term will make it eas­ier to re­cruit peo­ple with the right qual­i­fi­ca­tions to the po­si­tion, he says.

• The Tax Om­bud to em­ploy staff with­out hav­ing to ob­tain the con­sent of the Com­mis­sioner of the South African Rev­enue Ser­vice (SARS), as is cur­rently the case.

• The Tax Om­bud to con­trol its own bud­get, which is ap­proved by the Min­is­ter of Fi­nance. Cur­rently, the ex­pen­di­ture con­nected with the run­ning of the of­fice is paid out of SARS’s funds.

• The man­date of the Tax Om­bud be ex­tended to in­clude the in­ves­ti­ga­tion and re­view, at the re­quest of the Min­is­ter of Fi­nance, of any sys­temic is­sue re­lated to SARS’s ser­vice, the ap­pli­ca­tion of the Tax Ad­min­is­tra­tion Act, or the pro­ce­du­ral or ad­min­is­tra­tive pro­vi­sions of a tax law. Judge Ngoepe said his of­fice had re­quested that it be em­pow­ered to con­duct such in­ves­ti­ga­tions on its own ini­tia­tive. But, be­cause of fears that this could re­sult in it abus­ing its pow­ers, the pro­posal re­quires the min­is­ter to re­quest the in­ves­ti­ga­tion.

• If SARS or a tax­payer does not ac­cept a rec­om­men­da­tion by the Tax Om­bud, they must pro­vide the Tax Om­bud with rea­sons for re­ject­ing the rec­om­men­da­tion. De­ci­sions by the Tax Om­bud are not bind­ing on ei­ther the tax­payer or SARS. Cur­rently, ei­ther party can re­ject a rec­om­men­da­tion with­out hav­ing to pro­vide a rea­son for do­ing so. In its ex­plana­tory me­moran­dum, Na­tional Trea­sury says the pro­posed amend­ment will en­able the Tax Om­bud “to re­view the rea­son­able­ness of the rea­sons, to in­form fu­ture ac­tion”.

Judge Ngoepe said the pro­posed amend­ments have been re­quested by his of­fice, as well as stake­hold­ers in the tax­a­tion sec­tor, in or­der to strengthen the Tax Om­bud’s in­de­pen­dence from SARS.

The draft Tax Ad­min­is­tra­tion Laws Amend­ment Bill can be down­loaded from the home-page of the Na­tional Trea­sury web­site, www.trea­sury.gov.za. The pub­lic has un­til Au­gust 8 to sub­mit com­ments to acollins@sars.gov.za

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