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.

This includes:

1.1. Delay in the lifting of stoppers and the lack of timeframe for doing so; (SARS not finalising a verification within the TAT of twenty one 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, the VAT and Diesel refunds 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 process, the set-off of the refunds is delayed. 

Furthermore, where the diesel portion is being verified/audited, the VAT portion reflects as a liability, and SARS takes collection steps even though the taxpayer complied with the nett result declared on the return.

1.3. Debt set-off and recovery steps that are initiated by SARS even though the taxpayer submitted a valid request for “suspension of payment” 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 the dispute resolution process correctly, as a result, incorrectly referring a case for condonation.

2.2. The Notice of Invalidation of Appeal”  issued by SARS  in cases where more than 75 days have elapsed since a decision was taken on the objection incorrectly states the following:

 "A new NOA may be submitted within the prescribed period, and if late, a request for late submission must be submitted by you” 2.3. Non-adherence to time frames relating to the objection process.

2.4. Non-adherence 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 also be noted that the concern raised was previously only applicable to manual correspondence issued by SARS.


However, in the recent High Court judgment of the matter between
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 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.

Therefore, the systemic issue is expanded to include manual correspondence and correspondence that should reflect on a taxpayer’s "eFiler view".

This will include, for example, the “Final Letter of Demand”, the outcome of an objection/appeal, a notice of assessment, etc.

4.

Tax Compliance System (TCS).

Specific challenges are causing undue hardship to various taxpayers due to how the Tax Compliance System was designed.
These included cases:

4.1 Where there was an outstanding liability of R1;


4.2 Taxpayers are still within time to submit a  specific return and make  payment, but the system already reflects this as outstanding;


4.3 Cases wherein a debt emanates from fraudulent activities conducted by SARS or ex SARS officials;
4.4 The system being unable to reflect compliance in cases where payment arrangements are in place, including approved suspension of payment cases where the taxpayer is indebted to SARS.

5.

Raising assessments prematurely.

The notification of verification and the request for additional information allow the taxpayer twenty-one (21) days to submit the relevant information.

In some instances, SARS issues additional assessments without affording the taxpayer twenty one (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 who 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 and SARS who are 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 and SARS who are delaying collecting revenue for the fiscus.