SARS today released their latest service charter. In it, SARS states that they will do certain things within certain time periods, for example:
- pay out refunds within 72 hours in 90% of cases under certain circumstances;
- conclude audits within 90 business days in 90% of cases in certain circumstances; and
- make a decision on a request for suspension of payment within 30 business days under certain circumstances etc.
For things like the payment of refunds, the completion of audits and decisions on requests for suspension of payment where the Tax Administration Act, 28 of 2011 (“the TAA”) does not prescribe fixed time periods, these undertakings, if you will, are great! SARS is indeed to be commended for trying to commit to time periods where the TAA is silent as regards time periods. However, commitments to comply with legislatively prescribed time periods in say, only 50% of cases, is a bit worrying.
When it comes to tax dispute resolution (objections and appeals), there are prescribed time periods within which SARS (and also taxpayers) must do certain things. For example:
- Where a taxpayer requests reasons for an assessment, SARS must provide the reasons within 45 business days from the date of the request (unless SARS believes sufficient reasons have already been provided in which case they must inform the taxpayer thereof within 30 business days);
- SARS must make a decision on objection within 60 business days from the date of submission of an objection (subject to a couple of exceptions, for example, if SARS requested supporting documents or where the case is complex, and SARS notifies the taxpayer that they are unilaterally extending the time period);
- Where a taxpayer opts for ADR on appeal , SARS must give notice to the taxpayer of their agreement to ADR proceedings within 30 business days from the of submission of an appeal;
- Where a taxpayer is following the ADR process on appeal, the ADR process must be concluded within 90 business days from the date on which SARS notifies the taxpayer that it agrees to ADR proceedings etc (unless otherwise agreed).
In their latest service charter, it appears as if SARS is committing to comply with the above-mentioned prescribed time periods in between 50% to 90% of cases. What is to be made of such undertakings?
Should this be understood to mean that in between 10% and 50% of cases SARS will not try to stick to prescribed time periods? I certainly hope not! Perhaps it should be understood that SARS will commit to always stick to prescribed time periods and that if they don’t, taxpayers should know that it is the exception, rather than the rule? Let’s assume the latter and then ask the further question – is it good enough to aim for a 50% – 90% compliance rate with prescribed time periods?
Well, perhaps, if that is also what is expected of taxpayers? In the same service charter SARS states that taxpayers have an obligation to “Timeously engage … and comply with legal obligations” [my emphasis]. No margin for error there? Having said that, and to be fair, we are sure there are many taxpayers who do not comply with prescribed time periods and, if one had access to such data, perhaps the data will show a much higher level of non-compliance by taxpayers with prescribed time periods that is nevertheless tolerated by SARS? But even if that were the case, one would expect, to use the words of the court, “SARS, in particular, [to] take the lead and show efficiency” [my insertion] and to “…comply with time periods”.
Whether this level of compliance with prescribed time periods or at least the level of compliance SARS is aspiring to achieve is good enough is something best left to each taxpayer to answer.
Taxpayers should know though that if it is not “good enough”, there are remedies available and at their disposal in the case of non-compliance by SARS with prescribed time periods (other than complaining to no end) to restore balance and fairness. In short, if your case falls into the 10% to 50% of cases where SARS does not stick to prescribed time periods and it is not good enough, taxpayers have a choice to either accept it or not to accept it by taking the appropriate steps to restore balance and fairness.
 South African Revenue Service v MMY (Tax case number 12013/2012) (13 February 2014).