Ombudsman not a short cut for gripes

Tax 101 lectures should start off thus: “The SARS commissioner is appointed by the president in terms of the South African Revenue Service Act to collect South Africa’s taxes.

The minister of finance is a cabinet minister in charge of the National Treasury, who is responsible for determining the tax needs, policies and laws of South Africa.”

The common misconception is that the commissioner is answerable to the minister of finance. Wrong. He or she is answerable to the president.

The Treasury only has access to statistical data furnished by SARS in terms of the Tax Administration Act and thus cannot interfere with SARS administration or decisions. Th e aggrieved taxpayer who complains to the Treasury or the minister of finance is knocking on the wrong door.

The act, effective October 1 2012, seeks to address the unintended consequences that arise between the Treasury and SARS by creating the office of the tax ombudsman, a position now filled by retired Judge Bernard Ngoepe.

The public often see an ombudsman as a knight in shining armour, and Ngoepe will probably receive a raft of letters as soon as his office opens.

Taxpayers beware: the tax ombudsman cannot simply overrule SARS’s decisions. Yes, he may try to facilitate dispute resolution and monitor SARS service issues, but he is by no means the law.

The act is very specific concerning the mandate of the ombudsman. Primarily, the ombudsman is a monitor of SARS who reports to the minister of finance in terms of service delivery issues and pressing issues in the taxing acts that require legislative attention.

The tax ombudsman should in no way be interpreted as a stand-alone alternative to following the formal dispute-resolution steps set out in the act. The failure to timeously object against SARS assessments or appeal against its decisions can still strike out the taxpayer.

It will take the wisdom of a judge to assess the problems and commence legislative processes to tackle them. Hopefully, this will avoid protracted and expensive litigation that may leave most taxpayers even more confused.

Originally published in the Sunday Times: Money & Careers Tax Talk column.

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