Tax Ombud steps in between Sars and citizens

Elle-Sarah Rosatto, a partner of PWC, chaired a panel on the third day of the 10th Tax Indaba, which discussed the SA Revenue Service’s (Sars) enforcement trends, the status of longstanding systemic issues, and the role of the Office of the Tax Ombud (OTO).

The panellists were Thabo Legwaila, CEO of the OTO, Talitha Muade of the OTO, André Bothma of Irhafu, a tax services firm, and Wayne Broughton of Sars.

Legwaila explained that the OTO was created in 2014 as an avenue for taxpayers who have complaints against Sars regarding systemic and procedural matters.

“It is a struggle to get taxpayers to understand our mandate. We assist with administrative and procedural issues.”

Legwaila said that at its inception the office of the OTO was dependent on Sars for resources, “now we can employee our own employees, and we have our own budget”.

An issue is systemic where it impacts many taxpayers.

“This will be put in a basket of systemic issues, and we take it up with Sars.”

Legwaila added: “We can only make recommendations to Sars, and these are not binding. We also look at ourselves versus the rest of the world. There are still improvements that can be done. Some countries can issue penalties to the tax authority.”

Legwaila referred to the document setting out taxpayer’s rights released by the OTO in 2022. These rights are contained in legislation such as the constitution, tax legislation and other government documents, but the taxpayer can’t always access this.

Muade of the OTO said there are instances where a taxpayer has asked for clarity from Sars, and this has not been forthcoming. She warned that when a taxpayer lodges a complaint with the OTO, they must still comply with the time frames of Sars.

Broughton explained there has been limited capacity to deal with appeals, “we deal with about 6 000 appeals a year”.

“This year we have extra capacity, and we want to reduce outstanding appeals.”

They only go to court on 7-8% of matters, and Sars is successful 80% of the time.

Bothma said that an area of concern is where an employer has deducted PAYE from an employee but doesn’t pay this over to Sars. Sars will hold the employee responsible for non-payment.