JOHANNESBURG - The office of the Tax Ombud has seen a drastic increase in the number of complaints raised by individuals and representatives from taxpayers.
The complaints increased 62percent from 2133 to 3454, placing considerable pressure on the complaints resolution process at the Tax Ombud Office, as the number of staff members dealing with the complaints did not increase.
Tax Ombud Bernard Ngoepe said during the launch of his office’s annual report for 2016/17 the complaints centred around dispute resolution, delayed refunds and the incorrect allocation of payments by the SA Revenue Service (Sars). The report highlighted almost 20 issues raised by taxpayers or their representatives which are considered either “serious” or “systemic”.
One issue that was raised by taxpayers related to Sars raising assessments to offset tax credits without a valid reason. The Tax Ombud’s mandate has been widened to allow for investigations into systemic problems. The first report has dealt with the issue of delayed payment of refunds and the financial hardship it continues to cause taxpayers.
Many of the issues raised in the annual report were addressed in the first report by the Ombud on the systemic problem of delayed payment of refunds. Mark Kingon, the head of relationship management at Sars, said during a panel discussion on the report at Unisa that they had started implementing steps to adhere to the recommendations by the Ombud.
A systemic problem raised by the Ombud related to instances where Sars incorrectly raised assessments when there was a credit amount due to the taxpayer. However, the correct process was not followed. “We have terminated these steps,” Kingon said.
The revenue office has also taken steps in terms of VAT, and have committed to making system changes to income tax. Sars has also been accused of not following the time lines set out in the Tax Administration Act. Kingon referred to instances where the payment of refunds had been stopped because of valid reason, but the “stoppers” had not been lifted timeously when taxpayers had complied with all the requirements to get their refund.
He gave the assurance that they were putting steps in place to ensure that once the taxpayer had complied, the stoppers would be lifted timeously. Sars was also looking at “pro-active ways” for the changing of banking details and of verifying them. “It is one of our key fraud areas where people try to divert refunds to illegitimate accounts.”
Kingon admitted that their “checks and balances” were causing honest taxpayers hardship. Piet Nel from the South African Institute of Tax Practitioners (SAIT) raised the issue of insufficient communication with taxpayers before additional assessments were raised. He said this led to their objections being labelled “invalid” or they were not able to meet the time lines to object to the assessments.
“We are pleased to see that Sars has implemented some of the recommendations in the report (by the Tax Ombud on delayed refunds) but we still find that Sars is not keeping to the time lines.” Kingon acknowledged Sars needed to communicate better since the issue of communication was behind many of the complaints against the service.
“We have to ensure that clients (taxpayers) are empowered to know exactly what is going on so they can fulfil their legal obligations whether to pay, dispute or ask for reasons.” South African Institute of Chartered Accountants senior executive for tax Pieter Faber said if there was a loss of trust then a lot of other things started to go wrong.
The perception of distrust had a substantial “knock-on effect”. If there was distrust in the way the government spent money, there would be distrust in the way the government collected money, he noted. SAIT chief executive Keith Engel said it was clear that many of the issues raised were operational and not because of “some evil plot” to get back at taxpayers.
He added Sars and taxpayers should “give each other some slack”. All facts should be placed on the table and people should be allowed to state their case. “There are bad apples out there but they are not the majority. "Unfortunately the view is that they are the majority, which means that bad policy will follow. I hope we can move away from that.”
- BUSINESS REPORT