Tax filing season opened at the beginning of July, and Tax Ombud Judge Bernard Ngoepe has made an impassioned plea to millions of taxpayers to file their returns.
He says money for the government’s service delivery programmes is derived from taxes. “It’s important that people remind themselves of the importance of paying taxes that are due. Look at our hospitals and our schools in rural areas – they lack basic things like proper toilets. We need that money,” Judge Ngoepe said during an interview with Personal Finance at the Office of the Tax Ombud in Menlyn, Pretoria this week.
He says that just as it’s important for people to pay their taxes, it’s crucial that taxpayers are treated fairly by the South African Revenue Service (Sars). “Taxpayers shouldn’t feel treated unfairly, harassed and discriminated against, or that some are given preferential treatment and are not being pursued to pay taxes due,” says Judge Ngoepe.
Sars has been rocked by allegations of fraud and corruption, and is battling to plug a R50 billion tax revenue hole. Sars commissioner Tom Moyane was suspended following allegations that he unlawfully pushed through value-added tax payments of R70 million to the controversial Gupta family, who are friends of former president Jacob Zuma.
In May, President Cyril Ramaphosa announced a commission of inquiry into tax administration and governance at Sars, whose reputation has been severely dented by the allegations. Ramaphosa said he expects an interim report by September and a final report by the end of November.
Judge Ngoepe says he’s aware of the allegations against Sars and how they’ve affected its reputation. “But quite frankly, that’s Sars’s problem and not the Office of the Tax Ombud. My office is independent of Sars.”
He admits, however, that as a citizen he’s concerned about how the revenue service is run. “Sars is an important institution that has to make sure that money is collected for the state to carry out its service delivery initiatives,” says Judge Ngoepe. “Inasmuch as there are challenges in Sars, we hope in due course that those challenges will be sorted out.”
He says his office normally experiences an increase in complaints from taxpayers when filing season is near. “[They complain] about how they are treated, their frustrations, and we do our best to assist them. Our disappointment is that Sars sometimes take too long to finalise these complaints.
“In many instances, we have found that we are able to get co-operation from Sars, although we feel they’re not responding promptly to queries we send to them.”
He says amendments to the Tax Administration Act were aimed at improving the independence of the Office of the Tax Ombud so that it does not depend on Sars for finances and recruiting staff. “We are engaging a process in terms of which finally and hopefully this office will be a separate institution altogether, on its own in every respect. We are moving in that direction. We hope to achieve that as soon as possible, but a lot of things are not dependent on us,” says Judge Ngoepe.
He says the office’s relationship with Sars, which is governed by law, has been characterised by mutual respect.
“However, when we feel that Sars is wrong, we do take them on. We have, in fact, submitted annual reports to Parliament in which, in certain areas, we are critical of Sars, and have raised displeasures and concerns regarding Sars.”
Judge Ngoepe says there is an understanding between his office and Sars that taxes must be collected fairly and efficiently.
He feels that collected taxes should be handled in a proper manner to benefit those in need. “Don’t give people the impression that money is being used in a corrupt way to benefit some people, or that money is used to benefit some people with political connections, and so forth.”
He warns if that were to happen, the country would continue having problems as far as revenue collection is concerned. “The bottom line, therefore, is that everybody has to pay their tax, but there is a huge responsibility on those who are going to administer those monies. (They have) to make sure the monies are used properly to benefit those we believe should benefit from those monies and not the select, privileged few.”