By Graeme Palmer
On 4 July 2012 the Tax Administration Act 28 of 2011 became law and it is expected to come into operation before the end of the year. The Act requires the Minister of Finance to appoint a Tax Ombud for a renewable term of three years. If the office of the Tax Ombud is to be a valued resource for taxpayers it must be independent and effective when resolving complaints with the South African Revenue Service (SARS).
Disagreements with SARS over the interpretation of law will still be dealt with through the objection, appeal and court processes. The Tax Ombud’s mandate is to review and address taxpayers’ complaints which relate to service, procedural or administrative matters arising from SARS applying the provisions of tax laws. Before submitting a complaint to the Tax Ombud the taxpayer must first exhaust all other channels such as the local branch office, call centre and the SARS Central Complaints Office.
It will be the Tax Ombud’s function to resolve taxpayers’ complaints through investigation, mediation and recommendation. These procedures are to be conducted in an informal, fair and cost effective manner. It is important that the Tax Ombud is seen to be objective and independent when reviewing or resolving complaints with SARS. Part of this challenge will be that their office will be staffed from employees seconded from SARS with all the expenditure connected with their functions being paid out of SARS funds.
The Act requires SARS to give the Tax Ombud access to information in its possession in order that it can perform its duties. This should enable the Tax Ombud to make informed recommendations when resolving complaints. However, the recommendation made will not be binding on the taxpayer or SARS. It would be a disappointing result for a taxpayer to follow all the prescribed complaint channels only for SARS to disregard the Tax Ombud’s recommendation.
The introduction of a Tax Ombud is a welcome development to our tax law but if it is to be effective not only must it be independent when resolving complaints but SARS will also have to co-operate by complying with the Tax Ombud’s recommendations. Without this the taxpayer will be no better off than before the introduction of the Tax Ombud.
Graeme Palmer is a Senior Associate in the Commercial Department of Garlicke & Bousfield