SAIT Webinar. 26 July Gert van Heerden Senior Legal Manager: Office of the Tax Ombud

Transcription

1 SAIT Webinar 26 July 2017 Gert van Heerden Senior Legal Manager: Office of the Tax Ombud

2 GENERAL INFORMATION 1. Any complaints about the OTO services or cases can be escalated to: Reason Dube: Manager of Operations Talitha Muade: Senior Manager of Operations Eric Mkhawane: Chief Executive Officer as last resort. 2. Any reference to days in terms of this document refers to business days. In relation to the tax dispute resolution procedure it will not only exclude weekends and public holidays, but also the period between 16 December and 15 January.

3 ESTABLISHMENT OF THE OTO In terms of the Tax Administration Act, 28 of 2011 To ensure independence: 1. Minister appoints the Tax Ombud (for a term of 5 years) 2. The Tax Ombud reports to the Minister (not to SARS)

4 WHY THE TAX OMBUD Ø Ø Ø SARS has very wide powers. When a taxpayer has a complaint against SARS it is necessary to have an independent verification of what happened. Tax Ombud to ensure that there are checks and balances

5 APPOINTMENT OF STAFF v The Tax Ombud appoints staff i.t.o SARS Act v Purely for administrative reasons SARS does not exercise control over OTO staff.

6 FUNDING v Expenditure connected with the functions of the Office is paid in accordance with a budget approved by the Minister. v Funds are purely administered by SARS for administrative reasons, but SARS does not have any decision making powers over OTO budget and spending.

7 MANDATE OF TAX OMBUD s16(1)(a)review and address any complaint by a taxpayer regarding a service, procedural or administrative matter arising from the application of the provisions of a tax Act. S16(1)(b) Review at the request of the Minister or at the initiative of the Tax Ombud with the Minister s approval on any systemic/emerging issue relating to service matters or the applications of this Act or procedural/administrative provisions of a tax Act. v Mustdo so independently v Free service

8 MANDATE OF TAX OMBUD (CONT.) Recommendations by the Tax Ombud v Not binding on SARS or taxpayers. v But if not accepted by SARS/taxpayer, reasons for such decision must be provided to the TO within 30 days of notification of the recommendations. Such information may be included in the Ombud s report to the Minister or Commissioner under S19.

9 PROCESS 16(4) Exhaust SARS internal process (unless if have compelling circumstances) then complain to the Tax Ombud. This is in line with all ombudsmen and an international standard. The SARS internal process is only exhausted once a formal complaint is either rejected by or not resolved by the Complaints Management Office (CMO) within 21 business days. Follow ups and escalations to the contact centres and PCC s do not count.

10 THE REVIEW PROCESS 1.1 Is the complaint against SARS? NO STEP 1 Mandate Section 16(1) YES 1.2 Does the complaint relate to the application of a tax act? NO Matter not in Mandate: REJECT YES 1.3 Does the complaint relate to a service, administrative or procedural issue? NO The Complaint is in Mandate: Proceed to STEP 2 YES

11 THE THE REVIEW REVIEW PROCESS PROCESS (STEP 2) 2.1 Did the Taxpayer lodge a complaint with the CMO and has the TAT lapsed? NO STEP 2 Exhausted / Compelling Section 18(4) & (5) YES YES 2.2 Are there compelling circumstances to not refer the Taxpayer to SARS to exhaust? NO Matter in Mandate but may not review: REJECT Matter in Mandate and TP Exhausted / Compelling: Proceed to STEP 3 s18(5)(a) the complaint has been identified as a systemic issue; s18(5)(b) referring the taxpayer back to CMO will cause undue hardship; or s18(5)(c) referring the taxpayer back to CMO will not resolve the issue within a reasonable time.

12 THE THE REVIEW REVIEW PROCESS PROCESS (STEP 3) STEP 3 Limitations Section 17 NO 3.1 Is the taxpayer asking us to review legislation or tax policy? YES NO 3.2 Is the taxpayer asking us to review SARS Practice generally prevailing? YES NO NO 3.3 Is the taxpayer asking us to review a matter subject to objection or appeal? 3.4 Is the taxpayer asking us to review a matter before tax Court? YES YES Matter in mandate, exhausted / compelling, but limitations apply REJECT In Mandate, exhausted / compelling & no limitations apply: ACCEPT and Proceed to STEP 4

13 THE THE REVIEW REVIEW PROCESS PROCESS (STEP 4) STEP 4 Review Section 18(1)-(3) Determine the facts of the complaint by considering the taxpayers and SARS actions. Does the taxpayer have a valid complaint against SARS? YES NO Determine the best way to facilitate resolution and refer matter to SARS with Recommendation In Mandate, Exhausted / Compelling & No Limitations Apply, but there is a reason to TERMINATE

14 UPDATE ON INTERESTING SYSTEMIC ISSUES v Delayed Refunds: Special Stoppers Fraud Prevention Unreasonable delay from date on which TP complies with all requirements and audit/verification finalised Response from SARS, premature to disclose at this stage v Dispute Resolution: Condonation Letters SARS dealt with condonation in a very confusing way. We made recommendations to ensure taxpayers are properly informed of the correct next steps and time periods within which they need to act. SARS implemented a new procedure on efiling based on these recommendations in order to deal with condonation as a separate procedure all together in order to avoid further problems. We are monitoring, but are already aware of new problems. If any issues are encountered please inform us so we can ensure they are fixed.

15 UPDATE ON INTERESTING SYSTEMIC ISSUES v Dispute Resolution: Invalidation Letters Invalidation letters often directed taxpayers to object and incorrect timeframes when they were supposed to appeal which caught taxpayers in a perpetual loop of lodging amended objections. SARS implemented new letters and steps in efiling in order to fix the problems these letters have been causing. We are monitoring, but are already aware of new problems. If any issues are encountered please inform us so we can ensure they are fixed.

16 UPDATE ON INTERESTING SYSTEMIC ISSUES v Deemed Delivery ofdocuments Sections ofthe TAA SARS cannot rely on any of these legislative provisions by merely producing a copy of a letter. It must be able to confirm that correspondence was in fact handed to or left with a designated person; sent by post to the last known address; or sent to the last known address or fax number. The Last communication from SARS is that they are considering different options but may require all documents sent by post to also be sent via .

17 INTERESTING NEW SYSTEMIC ISSUES v Third Party Appointment Final Demand letters non compliance with S179(5) Final Demand must be sent more that 10 days before issuing TPA FinalDemand MUST include specific information SARS Response: Acknowledged certain deficiencies and undertook to review the standard letters. We are monitoring the implementation. We are still receiving complaints of this nature as SARS has resorted to manual demand letters until it can amend its system generated letters. Some old final demands still slip through or where final demands were issued prior to the amendments to s179(5) it still proceeds with TPA s without sending new ones that comply with the Act.

18 NEW SYSTEMIC ISSUES v Undue Delay in Payment ofrefunds Firstsystemic review onoto s initiative. Approval granted by Previous Minister offinance. Wide scope, will look into whether or not SARS is delaying payment of refunds unduly as has been alleged by stakeholders. Taxpayers and tax practitioners had the opportunity to make submissions to the Tax Ombud. Extensive data and information was collected from SARS and analysed. A preliminary report has been sent to SARS to allow it the opportunity to respond. A final report will be issued by the Tax Ombud once SARS responses have been taken into account.

19 THE FUTURE v Institutional independence looking at different models without creating a financial burden v Footprint expansion v Regularly monitoring our effectiveness (whether result in changes in timeframes) v Service Charter v Regulations

20 THANK YOU