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CAPE TOWN - The Tax Ombud report on Sars’ delays on tax refunds confirms the DA’s long-held belief that the revenue service has intentionally delayed tax refunds. 

The DA feels vindicated after they requested former Finance Minister, Pravin Gordhan, to call the Tax Ombud to conduct an investigation into any systemic problems that result in the delayed refunds to taxpayers, said DA Shadow Deputy Minister of Finance Alf Lees.

The DA will now propose that the mandate given to Sars is reviewed and where it is required, we shall introduce amendments to relevant legislation that will ensure that refunds are paid out without delay in line with the Tax Ombud’s report.

The report highlights that Sars have abused the system to delay the refunds of taxes and that these delays would unduly increase the reported tax amounts such as the record tax collections of R1.144 trillion “achieved” in the 2016 tax year.

The report states that ‘the residual (non-paid) taxpayers may be of very high value, as indicated in the Report, whose payments, once made, would reduce the amount of tax collected over that particular period. It is therefore imperative that they be paid out timeously.’

This contradicts the assurances given by Tom Moyane, the Sars Commissioner, who has stated there were no undue delays in the payment of refunds, according to the DA.

When Tom Moyane next appears before the Standing Committee on Finance on the DA will ask him to explain why the Tax Ombud has now contradicted his statements, in that there were no delays in refunds.

The undue emphasis given to Sars rather than taxpayers in the Tax Administration Act is because Sars employees and not National Treasury officials have previously driven the drafting and adoption of the provisions of and amendments to the act, according the DA.

The report by the Tax Ombud, Judge Bernard Ngoepe, states that “It is clear that the system allows for Sars to unduly delay the payment of verified refunds to taxpayers in certain circumstances. This has become a systemic issue. The system does not sufficiently protect taxpayers. The removal of the obstacles discussed in the Report, as well as any others, would go a long way towards addressing the problem.”

 - BUSINESS REPORT ONLINE