Open systemic issues

1.

Delays in payment of refunds

1. Delay in the lifting of stoppers and the lack of timeframes for doing so (not finalising a single-period submission verification within the turnaround time of 21 days and multiple years within 90 business days);
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 this is delayed, the 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 shown on the return; and
3. Debt set-off and recovery steps are taken notwithstanding a request for suspension of payment being submitted to SARS.

2.

Non-adherence to dispute resolution timeframes and related issues

1. The SARS system not calculating the dates for dispute resolution correctly and incorrectly referring a case for condonation;
2. The Notice of Invalidation of Appeal incorrectly stating that "A new NOA may be submitted within the prescribed period, and if late, a request for late submission must be submitted by you”, in cases where more than 75 days have elapsed since a decision was taken on the objection;
3. Non-adherence to timeframes for the objection process; and
4. Non-adherence to timeframes relating to the appeal process.

3.

Inability on the part of SARS to confirm correspondence was sent.

(This applies to both manual correspondence "eFiler view" correspondence.)

Where taxpayers allege that they did not receive correspondence from SARS, SARS simply responds by providing them with a copy of the letter but fails to provide proof that the correspondence was indeed sent to them on the specified date. It should be noted that the concern raised was previously only applicable to manual correspondence issued.

The recent High Court judgment on SIP Project Managers (Pty) Ltd v The Commissioner for the South African Revenue Service highlighted the importance of the delivery of the letter of demand to the taxpayer, via an electronic platform or to the last known address of the taxpayer. A notice generated by the eFiling system does not satisfy the requirement of delivery unless such notice is uploaded on the taxpayer’s profile. Finally, and very importantly for this Office, we cannot rely on the eFiler view in Service Manager to determine whether or not a taxpayer received correspondence.

The systemic issue is therefore expanded to not only include manual correspondence but also correspondence that should be reflecting on a taxpayer’s eFiler view. This will include, for example, a final letter of demand, the outcome of an objection/appeal, a notice of assessment, etc.

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

where the system is unable to reflect compliance when payment arrangements are in place, including approved suspension of any debt in question.

5.

Raising assessments prematurely

The notification of verification, as well as the request for additional information, allows the taxpayer 21 days to submit the relevant information. In some instances, SARS issues additional assessments without affording the taxpayer 21 days.

6.

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.

7.

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 a compromise. This negatively affects taxpayers who are attempting to become compliant and also results in delays by SARS in collecting revenue for the fiscus.

8.

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 delays in coding the taxpayer’s profile as a deceased estate and updating the executors’ contact details

SARS not coding the profile as a deceased estate and failing to update the executors’ contact details within 21 working days.

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.

SARS creates a “consistency check” case on a VAT period to conduct a verification

SARS creates a “consistency check” case on a VAT period, for the purpose of conducting a verification outside of the normal verification process and without a legal basis. This further results in a taxpayer’s tax compliance status being negatively impacted as the return reflects as outstanding while the “consistency check” case is open.