Not too long ago, SARS disputes were considered part of the normal tax compliance process by many accountants, auditors and tax practitioners. Filing an objection by just completing the form and attaching a few documents was par for the course, so to speak. In the last few years, however, that has changed. It has become technical.
SARS, in our experience, tends to be more technical than before, driven by the facts and the law for disallowing objections. They tend to hold taxpayers accountable for procedural breaches, calling them out quickly, thereby causing the dispute to stall. You see, these things tend to either result in disputes being disallowed or not being decided at all, both of which, in turn, ultimately result in the tax debt in question being collected/collectable, which, you may know, is kind of their job.
This “hard-line” approach SARS seem to be adopting in the tax dispute resolution space is probably caused by the ever-mounting pressure on SARS to collect and be more efficient with the resources it has. You will recall that the last attempted increase in taxes (the still borne VAT rate increase) met fierce opposition, and so if tax increases don’t help you reach collection targets, then you need to start getting resourceful (read, “creative”).
There are, however, two major issues for taxpayers and their advisors occasioned by this resourcefulness of SARS in the tax dispute resolution space. The first issue: few are equipped to deal with objections and appeals at a technical level. Why? Well, it was simply never required. For years, SARS would allow objections and appeals easily and overlook procedural breaches. When SARS, seemingly out of nowhere, started to do that which they arguably were always supposed to do but never did, it caught taxpayers entirely by surprise. Being efficient in tax dispute resolution requires proficiency in tax law, both substantive tax law as well as procedural tax law. Simply put, it has become technical, and the only thing that matters is the facts and the law.
The second issue: knowing when SARS’s “technical” approach is founded in law. Contrary to popular belief, SARS officials are not always right (nor are they always wrong either, to be fair). Simply always trusting the process and SARS officials is not, in my experience, an option. Too often have I seen objections being disallowed incorrectly, alleged procedural irregularities on the part of the taxpayer used to stall disputes or push disputes into the litigation space (probably knowing full well that few taxpayer have the appetite to litigate), and irregular steps being taken by SARS themselves (including things like, for example, invalidating requests for reasons and remittance requests and declaring objections late when they are not late and taking collection action when the debt is suspended etc). Knowing when and how to keep SARS “in check”, is a crucial skill required in order to be efficient in tax dispute resolution.
Indeed, tax dispute resolution is no longer just another step in the tax compliance process. It is a speciality field requiring a unique combination of skills. Unicus Tax Specialists SA is a tax dispute resolution speciality firm comprising a staff complement with backgrounds in accounting and law, specialising in tax. Unicus Tax has saved taxpayers over a R1b in undue taxes and boasts a 100% success rate with objections and appeals.
