Tax season has opened and there’s always unhappiness with tax returns.
To mitigate the discontent, the Office of the Tax Ombudsman (OTO) was set up to help, by acting as a mediator between the reluctant taxpayer and the revenue authority.
Established in 2013, the OTO was at first hamstrung by its dependence on Sars. It could not appoint its own staff, it relied on the revenue service for funding, its ombudsman was only appointed for a brief, three-year term, and it could not launch investigations. In January, that changed.
The ombud’s term has been extended to five years (renewable); it’s able to appoint its own staff, launch investigations, and demand reasons for not following its recommendations within 30 days from either Sars or the taxpayer.
Those reasons are noted in the OTO’s report to the Finance Ministry. Still, it cannot make binding rulings - the ombud is only able to make recommendations. This doesn’t necessarily render the office toothless though, because Sars generally toes the line because it accounts to Parliament.
Emboldened
Having more power has given them courage to take on challenges. The CEO of the office, advocate Eric Mkhawane, said: “More powers obviously mean we can take on systemic reviews where there are no complaints: now we can initiate investigations. Previously, we were limited to acting on complaints. Now we can look at underlying issues.
“We produce an annual report where we indicate serious issues. We hope that the Standing Committee on Finance will force Sars to account. The Tax Administration Act is very clear: where they don’t agree with our recommendations, they must provide reasons.”
Vat refunds
In March - barely two months after the OTO was granted more power - Tax Ombudsman Judge Bernard Ngoepe wrote to then-finance minister Pravin Gordhan, asking for permission to launch a probe into whether “systemic problems” at Sars are to blame for widespread delays in the payment of refunds. The office had received in excess of 500 complaints about VAT refunds, the judge explained. Permission was granted and the provisional report has been handed to Sars for comment.
“We expect them (Sars) to respond before the end of the month, after which we’ll produce a final report. We want the public to know what we’ve done about it because taxpayers deserve to know what’s happening with their money,” the judge said.
Concern
Of great concern are reports about wasted taxpayer money. Paying tax, we’re told, is the right thing to do (if you don’t want Sars on your case) - much like paying your television licence.
But, with reports of taxpayer-funded weddings and wasted government expenditure, encouraging compliance is a hardship.
Mkhawane said: “We try to stay away from political issues - it’s outside our mandate. But we want a good tax administration and anything that undermines that is problematic.
“I’m not a politician, although I care deeply about the way in which our taxes are being spent. It’s public money - it shouldn’t be misspent by private individuals. It’s not just one family: we’re hearing far too many reports about taxpayer money being wasted and the poorest are suffering the most. I come from the rural areas and I know how people are suffering.
“It’s a deplorable situation,” Mkhawane said.
Ensuring fairness
The OTO provides taxpayers with a fair, simple and free way to seek resolution for a service, procedure or administrative dispute with Sars - but its jurisdiction is limited and taxpayers must first exhaust the revenue’s internal processes. Just under 40% of complaints received were rejected in the previous financial year - because Sars’ internal processes weren’t followed.
Mkhawane said they can’t change the law.
“We can’t review tax policy or legislation that’s contained in the (Tax Administration) Act. So, if people have specific problems with the act, they need to go to court. If there’s an objection or appeal, we only deal with the administrative aspects of that.
“If there’s anything that relates to Sars policy, we can review, whether it’s service, procedural or administrative aspects, so long as it falls within our mandate.”
Exhausting Sars procedures is not necessarily the only option available to taxpayers, said Mkhawane.
“If there are compelling circumstances, they can approach us directly. If they’re facing severe hardships - it’s threatening your business and you may go under if you wait for Sars, then you’re within your rights to approach us directly. Also the act gives us discretion - where a wait is not reasonable.
“We recently helped a businessman who was waiting for a VAT refund for an inordinate amount of time. His business was under threat because its cash-flow was severely impaired - if he didn’t get his refund urgently, he would have had to close his doors. There was a genuine delay so we intervened.”
Tips for tax season
Mkhawane says be honest and submit on time. “Don’t wait for the last minute. Have your documents ready - all your documentary proof. Claim only what you are expected to claim. Don’t take chances, or overestimate your expenses.”
He warns against tax practitioners who promise they’ll get you a refund before having seen your documents. “They will try to force a refund and may be coming up with ways to defraud. If SARS detects that, the taxpayer can be made to repay triple the amount they were refunded. That’s very dangerous because you can get into big trouble.”
How to lodge a complaint with the OTO:
1. Phone the call centre or visit your local branch to discuss your complaint, and get a case number. Give them a “reasonable time” (typically a minimum of seven days) to attempt to resolve your complaint.
2. Submit your complaint either in writing, telephonic or via e-filing to the SARS Complaints Management Office.
Call 0860 12 12 16 for details or visit
. If your matter still hasn’t been resolved, you can approach the OTO.
3. For an OTO complaint form, visit the Office of the Tax Ombud, or you can call them, fax or email to ask for a copy. It’s also available at taxombud.gov.za
4. Take your time to read through the form and gather all the necessary information before completing it. Document the factual situation of your complaint in chronological order. Attach all the relevant supporting documents. Ensure the form is completed in full. Write down the reference numbers from SARS or, if escalated to a SARS branch, indicate the name of the branch, date and person you dealt with.
5. All complaint forms must be signed and dated. If the form does not allow you to relate your complaint fully, use extra paper which must be attached to your complaint form. The OTO will not accept unsigned forms. If there is not enough evidence to support your complaint, the matter may be closed. However, the OTO will give you an opportunity to substantiate your complaint or provide the necessary evidence.
6. If you feel you have compelling circumstances, there’s a section where you need to explain your reasons for not following SARS’ complaints process.
The OTO cannot assist in the following instances:
1. Legislation or tax policy - to address these issues, send your tips to the Finance Minister ahead of his annual Budget speech or attend parliamentary hearings on draft legislation;
2. In matters before court or on appeal, these must be dealt with by the Tax Board or Tax Court, so you will be heard by an independent tribunal that is capable of making a binding decision.
* Additional information from
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* Georgina Crouth is a consumer watchdog with serious bite. Write to her [email protected]
Follow her on Twitter: @askgeorgie