Sars’ service becoming unfair and dishonest
REGARDING the current Tax Ombud investigation into Sars: it is concerned with delays in refunding VAT. The concerns extend further than VAT though. In my experience, some of my clients have been waiting for VAT credits since May.
Sars simply journalises the VAT credit away, without any explanation. Sars is supposed to raise a VAT217 additional assessment with an explanation for the additional assessment and provide an opportunity to object thereto, but it is simply avoiding this objection process now. In some of these cases Sars gave me the very witty response to my enquiry into their irregular actions, that I have five years to claim my input VAT and I can simply add these invoices to the next VAT return, which would be two months later.
When we did that, they journalised the VAT credit away again in exactly the same fashion as before, which was now larger than in the first period because we had two successive VAT credit periods. It is now almost impossible to obtain a VAT refund. The net result is that taxpayers are finding different ways to claim their VAT credits. Sars’ actions are creating anger, resentment and a shift in thinking towards devious ways of recouping these credits.
In terms of personal income tax assessments, assessors are disallowing valid expense claims of taxpayers, which were allowed in the past, despite full documentary evidence having been furnished to Sars.
Notices of objection are simply swept aside and the same expenses are rejected again and again. In certain cases we have lodged and processed as many as eight objections to the same matter before it is resolved. In some cases they refer in their assessments to letters, which were never sent to the taxpayer nor the tax practitioner and do not even appear on e-filing.
Lots of taxpayers are uneducated in tax processes and very specifically about the Tax Administration Act and when they find out months later that Sars has treated them unfairly and unlawfully, they are told that they only had 30 days to lodge an objection and that they now have to pay the incorrect and unlawful assessment.
Upon seeking assistance and guidance of tax practitioners, we find that Sars delayed the objection processes inordinately and alleged they never received the supporting documentation, and yet when we go onto e-filing and their own staff look on their own internal system, the documentation is in fact there. This allegation of not receiving information and documentation is a commonly used excuse for disallowing expense claims
Sars is reticent to acknowledge its own errors and to correct them in order to treat the taxpayers fairly and honestly.