JOHANNESBURG - THIS week saw the public release of the annual report by the Office of the Tax Ombud (OTO) presented by Tax Ombud Judge Bernard Ngoepe at the Unisa Muckleneuk campus in Pretoria.
Guest panellists - who included Keith Engel, the chief executive of the South African Institute of Tax Professionals, Pieter Faber from SA Institute of Charted Accountants as well as SA Revenue Service (Sars) group executive Mark Kingon - fielded a plethora of questions from business and members of the media regarding the OTO report and the conduct of Sars.
In his opening address, Ngoepe made a deliberate effort to quell any perceived prejudice in the handling of cases reported to his office.
"What perhaps is the most important part of the report is that what I may see as a higher point in the report, you may see as the lowest point. Nobody's case is too small, nobody's complaint is too big; they are all important to us." This echoed the ethos that the OTO has, to strengthen the taxpayers confidence in tax administration.
Perhaps the most emphasised extract from the report was a long running theme present in all three prior annual reports, which spoke of the numerous delays in refund payments to taxpayers. The previous annual report of 1 April 2015 - 31 March 2016 recorded that the delay in paying refunds topped the inventory of, "10 of the of the most serious issues encountered by taxpayers as well as identified systemic and emerging issues," as per section 19(2) of the Tax Administration Act.
Data requested by the OTO in the 2016/17 report indicates that the credit book of the South African Revenue Service increased significantly over the past three years. This included a spike in refunds paid during July of each year.
However, the value gets progressively less, with refunds paid during January, February and March seemingly below average.
The section of performance information in the report comprised of the situational analysis in the Ombud's service delivery environment.
Citing the increase in public awareness and tightening of fiscal conditions for the rise in complaint volumes during the last year.
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The OTO's mandate and request to the Minister of Finance was to grant approval of a review in respect of several complaints by taxpayers that Sars was unduly delaying the payment of refunds due to them.
The OTO stressed that the impact of withholding funds could be devastating to taxpayers, citing that, "what appears to be a small claim may have [a] serious cash flow impact on that of a small taxpayer company or an individual".
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The report makes mention of the challenges the OTO has had with its governing legislation, which has restricted its structural independence, while imposing limitations in its operational activities. The office proposed and was granted a number of amendments to the Tax Administration Act.
One of the most effective amendments made in the act is found in section 15(4), which states that the expenditure connected with the function of the OTO will be paid in accordance with the budget approved by the minister for the office; the change will insure that the strategic planning and budget allocation rest with the Minister of Finance.
This is a huge feat for the OTO which, prior to the amendment, meant that the Tax Administration Act provided the expenditure connected with the functions of the Tax Ombud be paid out of the funds of Sars.
Finance Minister Malusi Gigaba, in his forward in the annual report, encouraged taxpayers to effectively use the state-owned OTO,
"We encourage all citizens and residents to continue meeting their tax obligations with pride, and where there are disputes with SARS, to use all the avenues provided to resolve such."
Read the full annual report: Here