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​MEDIA STATEMENT

ISSUED BY THE OFFICE OF THE TAX OMBUD

DATE: 23 JUNE 2020

FOR IMMEDIATE RELEASE

TAX OMBUD RELEASES FINDINGS OF HIS SECOND SYSTEMIC INVESTIGATION

The Tax Ombud, Judge Bernard Ngoepe has released his long-awaited report on the investigation on systemic issues conducted against the South African Revenue Service (SARS).
 
The Report, the second to be released by the Tax Ombud, follows almost 20 months of investigation by the Office of the Tax Ombud (OTO) into complaints by taxpayers and other stakeholders, including Recognised Controlling Bodies (RCB), against the revenue collector. The complaints relate to the fluidity of the Pay As You Earn (PAYE) statements of account, and failure by SARS to adhere to the Dispute Resolution Rules, Procedures and Timeframes prescribed in the Regulations and the Tax Administration Act (TAA).
 
Judge Ngoepe said he obtained permission from the Finance Minister on 10 September 2018 as required, to investigate if the two matters listed above constituted systemic issues or revealed emerging systemic issues. “The intensive investigation, which included inputs from complainants and SARS, gave our institution insight into some important matters in the tax sphere. It revealed that some of the aspects of the two complaints constituted systemic issues while others did not. It was also clear that there had been some breakdowns in communication between SARS and taxpayers, resulting in confusion. We recommended that SARS refrained from sending letters containing information that was not relevant to the particular taxpayers as this caused more confusion,” said Ngoepe.
 
He added that on the PAYE complaints it was discovered that a combination of factors, including SARS errors, inadequate communication, absorption of credits, questionable letters, and lack of knowledge of the Payment Allocation Rules, contributed to the complaints being made. It is important to note that both SARS and taxpayers were at fault.
 
“On the Dispute Resolution Rules, we found that both taxpayers and the revenue collector failed to adhere to the prescribed timeframes. It is important to note that SARS was found to be at greater fault due to the power it wielded against taxpayers and the prejudice the latter might suffer; we therefore recommended that SARS adhered to the prescribed timeframes and addressed the fundamental causes of the delays it caused,” said Judge Ngoepe.
 
“I am grateful for the contribution made by our stakeholders, the cooperation and support we received from SARS, and most importantly my OTO colleagues who conducted the investigation. I am confident that working together with our stakeholders, including SARS, we would continue to reduce systemic issues and improve our country’s tax administration system,” he concluded.
 


 The full report is available here (click the thumbnail on the left)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issued by the Office of the Tax Ombud
Pearl Seopela, Senior Manager: Communications and Outreach
Mobile: +27 82 906-1404; e-mail: [email protected]
 
For more information and media interviews please contact Mr Jack Malatji at the office of the Tax Ombud on 081 772 8731; e-mail: [email protected]
 
 
 
Notes: The Office of the Tax Ombud (OTO) is an independent and impartial state institution that provides a simple, free and impartial channel to seek a resolution for a service, procedural or administrative dispute taxpayers might have already unsuccessfully tried to resolve through SARS’ complaints management channels. The OTO seeks to maintain a balance between SARS powers, on one hand, and taxpayer rights and obligations on the other.