Tax appeals
I Nits last published discourse, the Law Society introduced the controversial subject of income tax. It is fitting then that the next Law Society discourse be about tax appeals, which are regulated by the Revenue Appeals Tribunal Act 13 of 2019. This Act establishes the Revenue Appeals Tribunal which hears and determines appeals from rulings, assessments, determinations and directions of the commissioner general under any revenue law. Revenue laws include the Income Tax Order 21 of 1975; the Customs and Excise Act 21 of 1979 and the Value Added Tax Act 12 of 2011. In terms of a public notice issued by the Revenue Appeals Tribunal in November 2022, it was announced that the Tribunal is now operational and receiving cases from November 15, 2022. Its physical address was given as Suite 101, 1st Floor of the Development House, Swazi Plaza, Mbabane.
An objection by a taxpayer must be duly made to the commissioner general first before the appeal can be heard by the Revenue Appeals Tribunal. The decisions of the commissioner general that are appealable include the prevalent interest and penalties levied by the Eswatini Revenue Service (ERS) for defaults by taxpayers and refunds payable. Many readers who have had a brush with the ERS (popularly known as SRA in relation to income tax, customs duty and VAT will understand the importance of the establishment of the Revenue Appeals Tribunal. The Tribunal is also vested with power to hear and determine any other matter as may be prescribed by the minister, by notice in the gazette, to be a matter against which an appeal may be made under this Act. Regulations under the Act have been enacted and these were published at the beginning of November 2022 as the Revenue Appeals Tribunal Regulations 2022. in tax and customs matters. (b) two members who shall be chartered accountants registered under the Accountants Act, No.5 of 1985 with not less than seven years of experience as a chartered accountant, appointed in consultation with the Eswatini Institute of Accountants.
(c ) two members, who shall be legal practitioners with not less than seven years of experience in the legal profession and may have special knowledge or skills relevant to revenue matters, appointed in consultation with the Law Society of Eswatini.
(d) two members who shall be appointed from the business community on the basis of their knowledge and experience in finance, commerce or economic affairs.
The members of the Revenue Appeals Tribunal hold office for a period of three years and are eligible for reappointment for two terms only. Even though the law prescribes seven members of the Tribunal, not all of them have to sit in an appeal under the Act. Three members form a quorum provided one of them is a legal practitioner.
If the president is part of the panel, he/she shall preside or chair the proceedings. Where the president is not part of the panel, he/she chooses the member to preside and this member could either be a legal practitioner or a chartered accountant. The Act prescribes a full Tribunal of at least five members, ordinarily chaired by the president unless excused for good reason. The president determines which appeals are to be heard by a full Tribunal.
The decision of the Tribunal is that of the majority members present and, in the case of equality of votes, the chairperson has a casting vote in addition to the ordinary vote already made, resulting in the equal votes. A member of the Tribunal who has a direct or indirect interest in the appeal has a duty to recuse himself from the panel hearing the appeal. The violation of this duty to recuse himself/herself constitutes an offence punishable, on conviction, with period of imprisonment not exceeding three years.
The Tribunal is vested with power to summon any person to give evidence including the production of records, books of account, statements. A refusal or failure to attend as summoned, or to produce the required information or to answer fully satisfactorily to questions put to a witness constitutes an offence punishable with a E10 000 fine or to imprisonment for a period of not more than three years or both.
REGISTRAR OF THE REVENUE APPEALS TRIBUNAL
The registrar who is the executive secretary of the Tribunal is appointed by the president of the Tribunal on a competitive basis and on such terms and conditions as the Tribunal may determine. The registrar is responsible for the administrative business of the Tribunal and also acts as the Tribunal’s spokesperson. Most importantly, the registrar exercises his/her functions independently, impartially and in terms of the Act.
PROCEDURE FOR LODGING APPEALS
A taxpayer who is not satisfied with any assessment, demand notice, ruling or decision by the commissioner general on any of the revenue laws administered by the ERS may appeal to the Tribunal within a period of 30 days of receipt of the commissioner general’s decision. The notice of appeal must:
Have been first filed with the commissioner general within 21 days of receipt of the decision of the commissioner general appealed against. Be in the prescribed Form 1 available at www.rate.org.sz;
Be properly signed either by the taxpayer or an authorised representative.
Clearly state the decision of the commissioner general that is being appealed against and the grounds of appeal. Be accompanied by all material documentation of the appeal including the copy of the assessment objected to, the appellant’s written objection and the commissioner general’s reply to such objection.
Filed physically at the Tribunal registry in Mbabane or electronically at info@rate.org.sz.
SERVICE ON THE COMMISSIONER GENERAL AND REPLY
After the lodgment of the appeal, the commissioner general has 30 days to respond to the grounds of appeal raised by the taxpayer as per the notice of appeal. The response by the commissioner general must clearly state the matters which he does not dispute, matters which he disputes and the reasons thereof. The reply must be submitted together with all relevant documents supporting the response and such response must also be shared with the taxpayer after being submitted to the registrar.
EXTENSION OF PERIOD TO FILE APPEAL OR REPLY
Either party may apply to the Tribunal for an extension of time within which to file an appeal or reply. However, the Tribunal may only extend the time if it is satisfied that the failure by a party to give notice of appeal or to effect service to the opposite party was a result of:
An absence from Eswatini;
Sickness;
Any other reasonable cause that may have prevented the applicant from filing the notice of appeal or submitting documents within the specified period.
AMENDMENT AND ADDITIONAL INFORMATION
submitted 14 days before the appeal hearing date and a copy must be furnished to the other party.
HEARING
The registrar, in consultation with the parties and the President, fixes a date and place where the appeal is to be heard. The notification to the parties must be at least 14 days before the hearing. Evidence is given either orally or through affidavits in such manner as the Tribunal may direct.
ATTENDANCE AND REPRESENTATION
Each party to an appeal hearing is entitled to be represented by a legal practitioner or other representative of their choice. Persons entitled to attend any hearing of an appeal before the Tribunal include the parties, their representatives, or legal practitioners, witnesses (as and when they are called by the Tribunal) and a clerk of the Tribunal who acts as a secretary to the panel. Such clerk is designated by the registrar. In the case of a full Tribunal, the registrar is the secretary of the Tribunal.
WITHDRAWING AN APPEAL
An appellant may, at any time before the matter has been set down for hearing, withdraw an appeal by filling a notice of withdrawal, a copy being furnished to the commissioner general. A withdrawal after the appeal has been set down for hearing requires either the consent of the parties or the permission of the Tribunal.
REVIEW BY THE HIGH COURT
If either party is not satisfied with the decision of the Tribunal, they may, within 30 days of notification of the decision, apply for a review of the decision of the Tribunal at the High Court, which has power to extend the time period on application to it. The High Court Rules are thereafter applied in the prosecution of the review.
ESTABLISHMENT OF REVENUE APPEALS TRIBUNAL COMMENDABLE
Judging from the many disputes that members of the Law Society receive arising from decisions of the ERS, the establishment of the Revenue Appeals Tribunal is obviously a very welcome development which will come as a relief to many taxpayers who felt like challenging decisions of the ERS to its commissioner general was unfair as he would likely be biased in favour of the body he manages.