OPINION - The South African Revenue Service (SARS) released a Service Charter earlier this week. The Service Charter outlines taxpayers’ rights and responsibilities as well as service standards taxpayers can expect from SARS.
Acting SARS commissioner Mark Kingon urged South African taxpayers to become familiar with the document. He said, “The service charter is a service document which sets out the various timelines for different engagements with stakeholders and how they can hold us accountable. The charter sets out obligations of taxpayers, such as to make sure their declarations are correct and that they file returns timeously and honestly and not claim fictitious deductions. In turn SARS promises the South African public that the agency will be professional, courteous and treat taxpayers with ‘utmost respect’.”
Ian Matthews, Head of Business Development at Bravura, an independent investment banking and advisory firm, comments that the Service Charter promises fairness to taxpayers.
The Charter specifically mentions the following principles:
· Expecting you to pay only what is due under law
· Treating everyone equally
· Ensuring everyone pays their fair share
· Informing you if and when prescribed timeframes cannot be met
· Respect your constitutional rights and privacy by keeping your tax affairs strictly confidential
· Applying the law consistently and impartially
Matthews says that these principles are not always followed in practice.
The Tax Ombud’s report released in September 2017 found that SARS’s system allowed it to unduly delay the payment of verified refunds to taxpayers in certain cases, amounting to a whopping R25.86 billion.
The Tax Ombud found that a number of taxpayer complaints related to unduly delayed refunds was justified.
Matthews says that this is in stark contrast with news reports in March and April 2018 that SARS reportedly made two value-added tax refunds payments destined for Gupta-linked companies via a third party. Mattthews continues: “In difficult economic times one cannot close one’s eyes to corruption and the fundamental impact it has on the credibility of SARS as an institution. The days of blind trust in government are over.”
In launching the Service Charter, Mark Kingon said “We are going to go after all taxpayers without fear or favour in order for us to restore credibility. SARS is making an effort to deliver good service to the public and to be a top notch organisation of State. We want to do what is right.”
Compliance is for the good of the country, he added. Kingon also re-emphasised plans to reorganise teams tackling illicit flows on specific sectors like tobacco, fuel and alcohol, among other things.
Matthews says there is a lot of pressure on SARS to step up its game.
The tax authority has lost high profile individuals, and its technical skills base has been eroded. Matthews closes by referring to the remarks made by Tax Ombud, Judge Ngoepe, in September last year: “The benefits of an efficient and fair tax administration system that taxpayers trust are immense; so are the consequences of a system they distrust. A growing number of taxpayers, and the general public to a large extent, are becoming increasingly vocal about the way revenue is being used, or even abused, by those entrusted with its management. We all know that taxpayers need to be motivated to pay tax. It is therefore vital that government be seen as being prudent and ethical in the spending of taxes collected.”