Some good news for SA taxpayers
New & Improved Dispute Resolution Rules
When a taxpayer objects to an assessment issued by the South African Revenue Service (“SARS”) there are specific rules promulgated under the Tax Administration Act 28 of 2011 (“TAA”) that govern the entire dispute process, including deadlines for both sides. On 10 March 2023, a new set of rules was published by the Minister of Finance, which came into effect immediately.
These amendments happened somewhat under the radar with minimal public engagement or feedback. Nevertheless, and perhaps surprisingly, these changes all seem have a positive impact for the taxpayer – so get clued up in case you need to fight, we mean engage, with SARS! Today, we zip through the key changes.
Getting down to the nitty-gritty
Change 1: Increased time to object
The one that’s got everyone excited – taxpayers now have an additional 50 business days to object to an assessment, this is a significant increase from the original 30 business days, to the now 80 business days (Thankfully, no change was made to SARS’ response time!). Unfortunately, if the previous 30 business day limit expires before the changes came into effect on 10 March 2023, a taxpayer will not benefit from the additional days granted. However, if the previous 30-day limit only expires after 10 March 2023, then the taxpayer is one of the lucky ones and can utilise the new 80-day period.
Change 2: Facilitator rules
Previously, facilitators were appointed by SARS and were usually SARS employees (hmmmmm…). The new rules seem to suggest that both the taxpayer and SARS are entitled to consent with regard to the facilitator. Furthermore, the facilitator now has a mere five days to deliver the interim report after the Alternative Dispute Resolution (“ADR”) meeting. This is over and above the ten days granted for delivery of the final report. So, these two changes indicate greater objectivity and quicker turnarounds. More good news for the taxpayer!
Change 3: SARS applying judgements
SARS is now compelled to give effect to any Tax Court’s judgement within 45 days, by issuing the respective assessment in accordance with the judgement (provided that SARS does not appeal). This should significantly clear up some of the mess with regard to long, frustrating delays caused by SARS.
Change 4: Email works!
A small one, but a goodie – your email address is now officially good enough to classify as an “address for delivery”. Yay for finally getting with the times!
That's it, folks!
The cause of many taxpayer headaches is the grounds on which the taxpayer may dispute. Under the latest changes, taxpayers may now appeal on grounds that were not mentioned in the notice of objection (of course this is tax, so be on the lookout for exceptions, and exceptions to the exceptions!). Taxpayers should however also note that if insufficient grounds are provided for an assessment, then that may in and of itself be sufficient grounds to lodge an objection.
All in all, the changes made to the TAA and the accompanying rules are helpful, sensible and beneficial for taxpayers. Nobody wants a tax dispute, but it’s critical to understand the tools at hand if you get dragged into one, and these changes have definitely improved the tool-kit. As always, any tax dispute should be considered strategically and holistically, so if you’re embroiled in any dispute, assessment or other liaison with SARS, contact us right away!