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Tax Ombud release findings of second systemic investigation against SARS
This week the South African Revenue Service tolled of the full extent of its problems by revealing a shortfall of almost R300 billion leaving the government with less money to spend at a time it’s most needed. And yet the people who pay this dwindling amount of tax are often disputing this every step of the way. How often and how serious are these dispute. Tax Ombud Professor Thabo Legwaila, CEO of the Tax Ombud joins CNBC Africa for more.
Thu, 25 Jun 2020 16:23:14 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The investigation highlighted inaccuracies in pay-as-you-earn statements and advocated for improved communication between taxpayers and SARS to streamline tax compliance.
- Delays in resolving disputes and complaints due to systemic issues within SARS necessitated recommendations for swift corrective actions and better adherence to regulatory timeframes.
- The COVID-19 pandemic exacerbated tax dispute challenges, leading to communication breakdowns and delayed resolutions, prompting the need for enhanced cooperation and efficiency in the tax system.
The South African Revenue Service (SARS) recently disclosed a staggering shortfall of nearly R300 billion, which has left the government with reduced funds during a crucial period. As taxpayers grapple with the diminishing amount of taxes they pay, disputes have become a recurring issue. Taxpayers often find themselves at odds with SARS over various matters, leading to a need for investigation and resolution. Tax Ombud Professor Thabo Legwaila, CEO of the Tax Ombud, delved into the details regarding the conclusions of a two-year investigation aimed at addressing taxpayer concerns and disputes with SARS.
The first part of the investigation focused on the accuracy of pay-as-you-earn statements. This segment was particularly essential as discrepancies in taxpayers' account statements could impact their compliance status. The investigation revealed flaws in the communication between taxpayers and SARS, highlighting the need for improved dialogue, with more onus placed on SARS to lead the communication efforts. Furthermore, the report pinpointed the causes of inconsistencies in tax clearance certificates and proposed recommendations to rectify these issues.
Transitioning to the handling of disputes and complaints between taxpayers and SARS, the investigation unearthed delays in resolving disputes, where SARS failed to adhere to stipulated timeframes. For instance, SARS sometimes miscalculated days for submitting necessary documentation, disadvantaging taxpayers. Systemic issues within SARS' processes were identified as the root cause of these delays. The Tax Ombud recommended swift corrections to the system to ensure accurate calculation of timeframes and smoother dispute resolution.
Acknowledging SARS' willingness to address these systemic challenges, as well as emphasizing the role of taxpayers in meeting documentation requirements and understanding regulations, the Tax Ombud emphasized the need for cooperation from all parties to streamline the tax dispute resolution process.
In light of the COVID-19 pandemic and subsequent lockdown measures, the Tax Ombud's office encountered disruptions in communication between taxpayers and SARS, leading to delays in assessments and appeals resolution. The office observed an uptick in complaints from taxpayers facing financial strain due to delayed refunds and unresolved tax matters. However, with SARS gradually resuming operations and prioritizing urgent cases, coupled with enhanced communication efforts, many outstanding issues were successfully resolved, providing relief to taxpayers.
The Tax Ombud's findings shed light on the complexities surrounding taxpayer disputes with SARS and underscore the importance of efficient communication, timely resolution, and systemic improvements within the tax system to enhance compliance and taxpayer satisfaction.
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