MINUTES OF THE SARS NATIONAL OPERATIONAL STAKEHOLDER FORUM HELD ON TUESDAY, 11 MARCH 2014 FROM 11H00 TO 13H00 AT BOARDROOM 3, LE HAE LA SARS MINUTES

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1 NATIONAL OPERATIONAL STAKEHOLDER FORU INUTES OF THE NATIONAL OPERATIONAL STAKEHOLDER FORU HELD ON TUESDAY, 11 ARCH 2014 FRO 11H00 TO 13H00 AT BOARDROO 3, LE HAE LA INUTES RCB REPRESENTATIVES REPRESENTATIVES APOLOGIES 1. Nokuthula Ntshele (ACCA) 1. ark Kingon (Chairperson) 1. Natalie Zimmelman (AATSA) 2. Zahra Cassim (CIA) 2. Solly Parak 3. Helen Greenberg (CIA) 3. Sarvavanie Henson 4. ichael Dyke (CSSA) 4. Babs Naidoo 5. Joel Wolpert (CSSA) 5. Cecile Bothe 6. Ozias oyo (CSSA) 6. Godfrey odise 7. Ehsaan Nagia (IACSA) 7. Narcizio akwakwa 8. Lizette Burger (LSSA) 8. alana Eysselein 9. Colin Wolfsohn (SAICA) 9. Ntshavheni athele 10. Somaya Khaki (SAICA) 10. Anton Fisher 11. Ettiene Retief (SAIPA) 11. Zebeda amaila 12. Keith Pieterson (SAIPA) 12. Omar Ganie 13. ahomed Kamdar (SAIPA) 14. Emmerentia Fischer (SAIT) 13. Sharon Smulders (SAIT) ITE WELCOE AND APOLOGIES The chairperson opened the meeting and welcomed everyone present. CONFIRATION OF AGENDA The agenda was confirmed with 1 new item added and discussed at this point. A question was raised on the purpose of the National Stakeholder Forum and the duplication of national and regional meetings. Issues emanating from regions not followed up or escalated to the national meeting and the late notifications of meetings in the regions. Branch Operations / EBE Page 1

2 responded to this question by clarifying the purpose of the national meeting which seeks to address issues of national concern, with practical issues being addressed at a local branch or regional level. A concern was raised about minutes of a meeting held in Johannesburg or Krugersdorp where the items reflected issues that can only be dealt with at a national level (example was made of the debit pull /credit push facilities that could only be addressed at national meetings). A proposal was made for to consider developing a terms of references for these meetings. Numerous issues are raised at regional levels that are never resolved as it could be that it s the wrong forum to raise these issues. provided feedback on the developments currently underway to standardise engagements with RCBs. It is envisaged that this model will be implemented effective April The model is expected to address all concerns raised. and Stakeholder anagement 3. CONFIRATION OF PREVIOUS INUTES All 3.1 The previous meeting minutes were not addressed as all the outstanding issues from the previous meetings were raised as part of the agenda for this meeting. 4. NEW AGENDA ITES Senior Official indicated that it is awaiting a new delegation list from the Commissioner post the amendments to TAAct which took place in January will be publishing designations and not names. It is hoped the list will be published within the next two weeks. The purpose of the SSO was reiterated as responding to an obligation in terms of the TAAct and in application of the TAAct Appointments at Branches Tax practitioners are said to be struggling to get appointments; they are not informed when appointments are cancelled; RCBs require an update on the system implemented for Pretoria tax practitioners; to clarify what are the issues tax practitioners are coming to the office for instead of utilising efiling. The matter was raised as a national issue. Region 2 has responded to these complaints by agreeing and implementing a system to serve tax practitioners (who are unable to make their appointments) in the normal queue. Normal practice within is that tax practitioners are allowed one hour appointments. The Region is requesting that those tax practitioners making use of the normal queue service offering arrive at the branch offices no later than 15:00 as the branch offices close for business at 16:00. Report back was given of the cancellation process previously implemented for the Pretoria tax practitioners and it was reported to be working well with no issues. RCBs reported that appointment difficulties are experienced nationally, they have advised their members to make use of the ing facilities however, their members have been complaining as they are not getting responses on requests. committed to investigate and reporting back on the ing facility. Page 2

3 Another concern was raised about the fact that the Randburg branch required tax practitioner appointments to be made two weeks in advance; this system is problematic specifically when considering urgent issues needing immediate attention. raised a concern around the lack of technical skills when it comes to the scanning of supporting documents. Tax practitioners seem not to understand that scanners can be set to a different resolution for submitting documents to. to issue a guide on how to set up a scanner for submitting documents to VAT registration Difficulties experienced in the finalisation of VAT registration as every branch require different supporting documents. The Bloemfontein and Kimberley offices are currently taking their members through training on this process because of all the uncertainties. RCBs were reminded of the regulations published for certain entities and the regulations that have just been finalised for voluntary registration. Within the next two months regulations are expected to be published for comment on the issue of voluntary registration as it seems to be the burning issue in calculating turnover tax. is confident the legislative amendments will help to smooth out some of the complications currently experienced. The single registration process will result in a fundamental shift in how conducts these interviews. It is envisaged that the single registration process will address the need for training. shared information on its collaboration with the CIPC to further enhance information capabilities. On the analysis conducted on the CIPC database, it was found that ± companies registered with CIPC were not registered with for Income Tax. biggest challenge is with Trusts as each Trust aster has its own numbering system and cases exist where duplicate numbers appear. The aster will be implementing a single registration number system. has not been able to validate how many trusts they have on their system that is not registered with. envisage implementing the single registration system within the next two to three months. A communication strategic has been developed for each phase of the implementation process. RCBs made a proposal for to consider issuing VAT certificates via efiling in a PDF format as applicants reportedly approved during October 2013 are still waiting for their certificates. This causing complications for most businesses, as companies subcontracting use VAT registration certificates as part of their validation process odernisation 1. efiling time-out Tax practitioners are experiencing errors with the system when completing IT12s and 14s specifically when typing as the system does not recognise typing as an activity. Users are required to continually save to ensure information is captured. have also received complaints on the NOO and early morning time outs on efiling. It seems that the time out function is designed to see typing on the ITR12 as an activity; however the same is not applicable for ITR14s. A proposal was made for to Page 3

4 consider building a warning system similar to the banks. committed to submitting this proposal as part of the filing season system changes participation and attendance of conferences hosted by RCBs This matter has been addressed. Other issues on this matter to be attended to offline Notifications from The new TCS will provide that information. It has not been rolled out due to the single registration challenges in determining who is linked to a company. The new system to be rolled out shortly will give a dash board continually of clients compliance indicated by either green or red. Details on this system will be communicated at a later stage. RCBs are still receiving complaints from members of not receiving notifications from on the requests for information as well as some notifications from not having reference numbers. Examples have been shared with the TPU. committed to investigating the matter. reported that it is currently using the last four digits of a tax number as a reference number. This system was implemented one month ago and is currently used on all debt sms. is yet to ascertain the effectiveness of this new system Tax Returns Trust Returns do not pre-populate or allow for any corrections on efiling as it has not been modernised as yet. Feedback will be provided on the submissions made previously by RCBs on the revised Trust Returns shared for comment. Farming (individual returns) tax practitioners are advised, if more than 5 partners, the tax practitioner is to combine the partners. to include these changes in this year s filing season. Other changes on IT returns shared include: 6Quin Recoupment of money Intend changing the IT48 (possibly next year only) System enhancements to medical expenses; Section 10.C, Operating lease on employer provided vehicles looking at fringe benefit per vehicle as required by the law in terms of an operating lease Feedback on points from previous agenda items collection of debt and Suspension of Payments Complaints relates to communication, currently issuing notices directly to tax payers even if the system has the tax practitioner listed as the recipient for all communication from. to investigate and to remind collectors of the SOP in place on this matter. On the suspension of payment issue tax payers are to make a submission on the intension to object. Tax practitioners are to indicate why they are Stakeholder anagement Page 4

5 objecting. Tax practitioners were advised to apply section , however will not allow an application stating the tax payer intends to object but the reasons for the said objection are still to be determined. committed to issuing an explanatory notice on the interpretation of section All applications for suspension of payment are to be made to your local Branch office. was also asked to clarify the reasons for assessments, as the reasons currently provided are not sufficient. There is a need for an escalation process for matters not resolved. to develop a list of offices that tax practitioners can visit for debt management queries. Arrangements for debt Settlement arrangements being withdrawn as the person who the arrangement was made with does not have the necessary authority to take that decision. has different approval levels. Certain SSO s have the mandate. There are specific powers that are general in the TAAct and there are ones that require a SSO. Preservation orders are an example where a very senior Official is required to sign off on the settlement. It takes ± two weeks to process a request for suspension. This turn around also depends on the supporting documents being submitted. Tax payers have the protection of in Section 2. If has not responded within the required time, there is a defacto suspension in place. Dormant returns Every company is required to submit returns. will re-communicate this message. Debit Pull vs Credit Push As previously stated, no further comment from as this is a matter for the banks to address. Automatic payment of interest for VAT overpaid Will be implemented in due course, not sure when exactly Communications issues a) Receipts for payments are sent to tax payers even though the tax practitioner s postal address is listed for all mail. will investigate and provide feedback. Historically the changes to postal addresses allowed for 45 days for changes to be affected on the postal addresses, of late is requesting these changes to be affected on efiling without any guidance on how or where these changes are to be affected. Tax payers advised to open the last return submitted on the system, affect the necessary changes and resubmit the same return, or to ask for a correction where these changes can also be affected. Related to ID numbers, directionally ID numbers will be greyed out on all returns and will require a separate form to affect any changes. Any changes to sensitive information will require a visit to the branch similar to the system used by banks. b) NOO RCB Page 5

6 is not aware of any 2 years old cases. A close eye is kept on inventory in terms of individuals Challenges currently being experienced are where - A person files an objection on what is called an owners case - An owner s case is where the tax payer failed to submit proof in time. - A large % of clients who are still to provide this information are at notice to objection stage. - is now invalidating these objections if proof is not provided. - If invalidated, the tax payer still has an opportunity to resubmit the objection as oppose to disallowing the objection. - Tax payers have to follow the appeal route which is clogging up the appeals process when considering the volume in the process. - Tax payers to ensure that is furnished with the grounds for objections. Numerous cases have been logged with RCBs where a tax practitioner goes to branches for documents to be scanned, a few days later they get a request for more documents as the system is not reading the scanned documents. SAIT to share the VAT ADR1 for June last year with for further investigation. They are also to raise the matter with their local regional reps. c) Requests for documents i. is comfortable that most of the problems on the system have been fixed. PIT assessment currently on 23%. VAT and CIT are much lower that are stopped for assessment. is to consider standardising certain categories of individuals who are required to submit supporting documents. RCBs asked to share examples. A drop in taxable income was shared as an example for an automatic request for information. ii. additional assessment issued to soon disputes this statement indicating it was comfortable with the three cycles of 21 days tax payers have to respond before can take any further action. RCBs reported that the SOP is not being adhered to as additional assessments come through before the applicable time period has passed. RCBs are to share examples where did not adhere to the times as stipulated in the SOP. Tax payers are advised to ensure when uploading documents all the required documents are uploaded at the same time as outstanding documentations results in immediate disallowance. iii. Documents uploaded or scanned at the branch Tax payers receive requests for information after documents have been given to the branch offices for scanning as well as in instances where it has been submitted via efiling. It is recognised that these letters requesting information could be on its way or may have been automatically generated by the system as uploads are not instantaneous and would upload overnight. It normally takes 48 hours to reflect on the system. Another possibility is that documents submitted to the front office would be sent to the back office where it could take up to two weeks to upload causing the delays and the system continually sending these requests for information. committed to investigate the matter further. RCBs asked to share examples RCB RCBs RCBs RCB Page 6

7 iv. Input tax on delivery vehicles This matter has been addressed previously. will re-iterate what was done previously. All the cases as submitted by SACIA to be shared with the Compliance Centre for investigation and feedback. d) Notifications received to update bank details had challenges on bank details linked to the universal branch code. RCBs to take heed that not all the banks are on the AVS system. Only the top four banks are on this system. uses this system to validate the ownership of bank accounts. Tax payers will be required to verify bank details. had some challenges in communicating rejections to the branches. There is a letter currently being sent out to validate banking details at the branch. RCBs reported that no letters have been received for the last three months. committed to investigate and to provide feedback to RCBs. e) withdrawing funds from bank accounts without proper notification to tax payers. We ve had very few cases in the last two years. has disciplined staff on this matter. is pushing thousands of AA88 especially in arch. takes strong action against employees not following correct processes. 2. efiling issues a) No notifications of letters loaded on efiling to notify tax payers of letters uploaded onto their efiling profiles. also to ensure that the screens viewed by Tax Practitioners and the call centre agents are the same. b) efiling does not cater for para 19(3) of the fourth schedule All the problems previously reported have been addressed. There are no issues currently to report on, the refresh is working. c) efiling not able to issue two tax returns in same calendar year SAIT to make a submission on this matter 3. Payments to and Refunds from a) atter has been dealt with under b) Delay in VAT refunds the matter will be shared with the legal and policy team. c) atter has been dealt with under Tax exempt entities Page 7

8 will investigate and commit to update the list published on the website. is not under obligation to publish a list, there is just no restriction to publishing a list; it is not saying must publish a list. We would however like to publish a list of all public benefit organisations as tax payers needs to know which companies are exempt entities; however this is not priority right now. 5. Penalties a) When will reduced penalties be applied by USP is applied for a return that was submitted prior to October Tax payers have an opportunity to object and ask to be reviewed as an additional tax. Any understated penalties applied to returns filed prior to 1 October 2012 to date which relates to returns submitted prior to October 2012 can be objected to. Further information will be available on the website within the next 24 hours. 6. Section 6Quin Withholding Taxes a) Submit a FTW01 which is available in the market. is essentially paying money owed to the tax payer by a foreign jurisdiction. SAIT has made a submission to Treasury to extend the 60 day period to 90 days. has no objection to the submission. c) Separate declarations must be submitted for each agreement concluded Correct Legal needs to be able to valid each individually. 7. VDP has communicated turnaround times very clearly. will not be changing the 5 day rule VAT and Income Tax This could be a timing issue matter has been dealt with under VAT registration Requesting a suspension of payment Dealt with under phone calls to tax practitioners Dealt with under Single view roll out for VAT and PAYE Dealt with under modernisation process concerns It is not available yet, still awaiting a date Guides to re-issues guides Page 8

9 is to investigate if RSS feeds can go out to a designated address eetings for 2014 atter will be addressed with the new standardisation process to be introduced shortly. 6.1 Practitioner deregistration process Exco to sign off on a submission on this process. is aware that a large number of its clients are represented by unregistered tax practitioners. 7 General TCC recently rolled out changes in process. Compliance of everyone in company (end to end) challenges with how some groups are structured historically people could put two different tax numbers into the TCC this will not be allowed in future. The new system consolidates a tax payer as a legal entity will no longer at front office allow for an override of a TCC at branch offices; there has been too much collusion in this area. Implemented an auto approval and auto decline. A Legal entity for VAT purposes will no longer be able to request a TCC on a branch; the process has been changed will be looking at the legal entity as a whole and if all are not complaint none of the branches will be able to get a TCC. The TCC is valid for 12 months; if found non-compliant in any part of that period, the tax payer will not be able to get a re-print of the TCC as there is a re-validation done. If settling a return on the day, the tax payer will not be able to get a TCC. If settling debt by cheque on the day, will wait until the cheque has been cleared. In terms of foreign investments, below R4m will not be instantaneously as it will go to the compliance team working with is process for validation and above R4m will go through a full audit review process. SAIPA calls cut RCBs to provide case numbers where calls have been dropped. will investigate and provide feedback. to share provisional stats on the Credit Push initiative. CLOSURE : to release a gazette that is reducing the value of the cheques it is willing to accept to R from R For individuals who have cheques bouncing the payment facility will be closed. 6. The chairman closed the meeting thanking everyone present for their attendance and participation. Page 9