The jury is still out as to whether the Tax Administration Act (TAA) which was signed into law on 1 October 2012 favours the tax payer of SARS.
There is however one area which may tip the scale slightly in favour of taxpayers and that is the relaxation of the pay now argue later rule. This is the view of accounting firm PKF.
PKF said in a statement “Prior to the promulgation of the TAA, taxpayers who were aggrieved by an incorrect assessment had no choice but to pay the tax assessed on the due date and endure the long wait for a refund if an objection against the assessment eventually succeeded”.
The statement said while a taxpayer could always have submitted a request to SARS to suspend the payment of tax pending the outcome of an objection, feedback on these requests were rare and more often than not did not prevent SARS from commencing collection procedures. In addition, the request for suspension of payment could only be submitted after a taxpayer had lodged an objection.
“The TAA now determines that SARS may not enforce any collection of outstanding taxes between the date on which a request for suspension has been submitted to SARS and ten days after the date on which SARS responds to the request”.
In addition, a taxpayer can now submit a request for suspension of payment if he/she intends to lodge an objection but requires time or is busy drafting the often technical and time consuming grounds for objection”.
PKF said where necessary tax payers will be well advised to submit a request for suspension of payment of tax as soon as they receive an assessment against which they intend to lodge a well–supported objection to prevent SARS from collecting taxes that may not be due.