Aggrieved taxpayers are provided with a legislative mechanism in order to resolve disputes with SARS, the latest version of which came into effect on 11 July 2014 and was promulgated in terms of section 103 of the Tax Administration Act, No.28 of 2011. These legislative mechanisms are commonly referred to as “the tax dispute resolution Rules” and they were put in place in an effort to align with international trends which seek timeous and fair resolution of tax disagreements with the fiscus.
The tax dispute resolution rules prescribe various time periods to which both taxpayers and SARS must adhere in order for a dispute to be finalised efficiently and fairly. An example of such a time period is contained in Rule 7(1) of the tax dispute resolution rules, which provides that taxpayers are afforded 30 business days (from date of assessment/ reasons for an assessment by SARS) within which to lodge an objection to such an assessment. Where a taxpayer does not comply with this time period the dispute may not progress or may never be resolved.
A further example is contained in Rule 9 of the tax dispute resolution rules which places a specific obligation on SARS with regard to when SARS should make a decision on objection. Such a decision must be made within 60 business days of the delivery of an objection by a taxpayer. However, taxpayers are increasingly placed in a position where SARS do not adhere to this time period with seemingly no consequence for SARS.
While it can be appreciated that SARS receives thousands of objection on regular basis, it is also not administratively fair towards taxpayers to plainly accept non-compliance with the tax dispute resolution rules. So, what can you do about it?
Where the time periods provided for in the Rules are not be complied with by SARS, an aggrieved taxpayer may address the issue with the relevant SARS branch and/or SARS’ call centre and where not resolved, the issue will have to be reported to SARS’ Complaints Management Office (CMO), which has replaced the SSMO office within SARS. Should the CMO not be able to resolve the matter, the taxpayer may, only after a taxpayer has exhausted SARS’ internal administrative complaints resolution process (unless a taxpayer is able to demonstrate that there are compelling circumstances as to why the Tax Ombud may be approached directly), approach the Tax Ombud for further assistance.
Approaching the CMO and/or Tax Ombud, whilst mostly effective to get administrative issues resolved, can be extremely time consuming and where, for example, an objection should have been finalised already, going through all these channels just to get timeous feedback on an objection is counterproductive.
While litigation should always be a last resort, it is unfortunately sometimes the fastest way in getting non-compliance with the rules resolved and in the case of non-compliance by SARS with the tax dispute resolution rules, applying for default judgment is a sure fire way to get SARS’ immediate attention.
Tax litigation is however complex and full of technical and procedural landmines which can trigger disastrous results for your case if stepped on. It is therefore recommended that a competent team specialising in tax dispute resolution be consulted for assistance in calling SARS to action om missed deadlines.