Tax ombud given limited powers

Bernard Ngoepe. Image:www.unisa.ac.za

"Appointing a person of his stature and standing brings both the ability and independence to a position that commands respect from the South African Revenue Service (SARS) and the taxpayer alike," Dingley says.

"Unfortunately, however, he has been given limited powers, so the success of his office is going to depend largely on his persuasive strength, administrative capacities, and the support of both the commissioner and minister.

"That his mandate is limited to service, procedure or administration means taxpayers will have to resort to the existing dispute-resolution processes in matters relating to interpretation and application of the tax legislation," Dingley says.

The appointment of a tax ombudsman arises from the Tax Administration Act, which can in effect last year. The act provides for the minister to appoint a tax ombud within one year of the inception date of the act.

The mandate of the tax ombud is to review and address complaints of taxpayers in respect of service, procedure or administration, where the taxpayer has exhausted the existing complaints processes and channels allowed by SARS.

Matters must be resolved through mediation or conciliation and the recommendations of the ombud are not binding on SARS or the taxpayer. The ombud must also identify and review systemic issues relating to service, procedure or administration that impact negatively on taxpayers.

"Limits on the ombud's authority are that he may not review legislation, policy, generally prevailing practice or matters subject to objection and appeal, except to the extent that they relate to service, procedure or administration. He may also not review pending matters or decisions of the tax court," Dingley says.

The ombud is required to report quarterly to the commissioner and annually to the minister. The reports must contain the most serious issues encountered by taxpayers and the systemic issues identified, together with an inventory of how the issues have or have not been resolved. The annual report to the minister must be tabled in the National Assembly.

Source: The Times via I-Net Bridge