Open Systemic Issues refers to systemic issues that have been brought to SARS’s attention with recommendations from the OTO on how best to resolve them; however, SARS is in the process of implementing remedial action or has implemented remedial action, but the issue remains open as the OTO is monitoring the effectiveness of the implemented measures. Collaboration between the OTO and SARS has reduced the number of Systemic Issues from over 20 to eight, which have remained open.

No. Systemic Issue Summary

1.

Delays in the 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, giving 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 shown on the return.

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 time frames and related issues.

This includes:


2.1. The SARS system not calculating the dates for dispute resolution correctly and incorrectly referring a case for condonation;

2.2. The Notice of Invalidation of Appeal (NOA) incorrectly stating: "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 lapsed since a decision was taken on the objection;

2.3. Nonadherence to time frames relating to the objection process; and

2.4. Nonadherence to time frames relating to the appeal process.

3.

Inability on the part of SARS to confirm that correspondence was sent to the taxpayer. (manual correspondence as well as "eFiler view" correspondence)

Where taxpayers allege that they did not receive correspondence from SARS, the revenue collector 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.

In the recent high court judgment of SIP Project Managers (Pty) Ltd v The Commissioner for the South African Revenue Service 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 was highlighted. A notice generated by the efiling system does not satisfy the requirement of delivery unless such notice is uploaded on the taxpayers’ 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 an example, the Final letter of demand, the outcome of an objection/appeal, 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 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.  Cases wherein a debt emanates from fraudulent activities conducted by SARS or ex SARS officials.

4. The system being unable to reflect compliance in cases where 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 time of twenty one (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, which is delaying collecting revenue for the fiscus.

7.

Failure to respond to the request for a “Compromise” within the prescribed turnaround time of thirty (30) 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 as well as SARS who is delaying collecting revenue for the fiscus.

8.

Failure to respond to the request for a Suspension of Payment within the prescribed turnaround time of twenty one (21) 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 as well as SARS who is delaying collecting revenue for the fiscus.

9.

SARS delays to code the taxpayer’s profile as deceased estate and to update the executor’s contact details.

SARS not coding the profile as a deceased estate and updating the executor’s contact details within 21 working days.

10.

SARS repeat verification cases.

Verification cases created due to two reasons which we believe is not appropriate:

1. Verification case created as a result of SARS issuing of a reduced assessment to give effect to the outcome of a dispute; and
2. Repeat verification cases with same risk and same requested supporting documentation.

11.

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

SARS creates a “consistency check” case on a VAT period, with the purpose of conducting a verification outside of the normal verification process and without a legal bases. 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.