Open systemic issues

1.

Delays in payment of refunds

1.1. Delay in the lifting of stoppers and lack of timeframe for doing so (not finalising a single period submission verification within the TAT of 21 days and multiple years within 90 business days);

1.2. VAT and Diesel refunds are declared on the same return, which gives a nett amount payable by or refundable to the taxpayer. AT SARS, however, they are reflected on two different systems, and manual set-offs need to be done to obtain the same nett result as reflected on the return. Where there is a delay in this, set off refunds are delayed. Furthermore, where the diesel portion is being verified/audited, the VAT portion shows as a liability, and SARS takes collection steps even though the taxpayer complied with the nett result displayed on the return; and

1.3. Debt set-off and recovery steps taken notwithstanding a request for suspension of payment being submitted to SARS.

2.

Non-adherence to dispute resolution timeframes and related issues.

(Refer to the 2020 Systemic Investigations Report: Complaints that SARS fails to adhere to the dispute resolution timeframes prescribed by the TAA and the dispute resolution rules promulgated under the Act for more details of all issues included in the systemic issue).

This includes:

2.1. Non-adherence to time frames relating to the objection process; and

2.2. Non-adherence to time frames relating to the appeal process.

4.

Tax Compliance System (TCS)

There are certain challenges causing undue hardship to various taxpayers due to the manner in which the Tax Compliance System was designed.

This has included cases:

1. where there was an outstanding liability of R1;
2. taxpayers are still within time to submit a specific return and make payment, but the system already reflects this as outstanding;
3. where a debt emanates from fraudulent activities conducted by current or former SARS officials; and
4. where the system is unable to reflect compliance when payment arrangements are in place, including approved suspension of any debt in question.

5.

Failure to respond to the request for a deferred payment arrangement within the prescribed turnaround times (21 days)

This relates to complaints where SARS fails to respond to the request for a deferred payment arrangement. This negatively affects taxpayers who are attempting to become compliant, as well as SARS, as it is then delaying the collection of revenue for the fiscus.

6.

Failure to respond to the request for a compromise within the prescribed turnaround times (90 days)

This relates to complaints where SARS fails to respond to the request for suspension of payment. This negatively affects taxpayers who are attempting to become compliant, and also has an adverse impact on SARS, in that it is delaying the collection of revenue for the fiscus.

7.

Failure to respond to the request for a suspension of payment within the prescribed turnaround times (30 business days)

This relates to complaints where SARS fails to respond to the request for suspension of payment. This negatively affects taxpayers who are attempting to become compliant, and also has an adverse impact on SARS, in that it is delaying the collection of revenue for the fiscus.

SARS repeat verification cases

Verification cases were created for two reasons which we believe are not appropriate:

1. when verification cases are created as a result of SARS issuing a reduced assessment to give effect to the outcome of a dispute; and

2. when repeat verification is done in cases with the same risk and the same supporting documentation.