Tax ombud helps taxpayers claw millions back from Sars

Thirty-five million rands.

That's how much money the Office of the Tax Ombud got back for just seven taxpayers in the year ending March 2019.

The biggest single refund for the period was R7.19m for VAT.

The top 10 tax refunds were revealed - without identifying the entities concerned - in the office’s annual report released in Cape Town on Thursday morning.

During the 2018/19 year, the office received 4,822 complaints, 32% more than the previous year. It resolved 2,043 cases. Revenue service Sars implemented the ombud’s recommendations in 99.27% of cases.

“That shows that Sars take us seriously, although it sometimes takes them some time to implement our recommendations,” acting CEO Gert van Heerden told TimesLIVE.

“It’s also a testament to the quality of our recommendations.”

Established almost six years ago, the office strives to “promote a healthy balance between Sars’ powers and duties, on one hand, and taxpayers’ rights and obligations on the other”.

But despite advocating for a taxpayer bill of rights since 2013, that has yet to happen, said the ombud, Judge Bernard Ngoepe, in his report.

“My office has already made valuable inputs towards the proposed bill of rights and now we urge Sars, National Treasury, parliamentarians and other stakeholders to ensure that it becomes a reality.

“I am convinced it will contribute towards strengthening our constitutional democracy and, to a considerable extent, improve the level of accountability on the part of the revenue collector and support an improved tax administration system.

“The latter will be of immense benefit to the country as it will improve public trust in the revenue collector and thus improve taxpayers’ sense of tax obligation,” he said.

The ombud is also pushing for the office to become structurally independent from Sars.

“The office must be, and be seen to be, independent of Sars,” he said. “Unfortunately, as things stand, there is a dependence on Sars for supporting governance, fiduciary and administrative functions. This hampers its work and compromises its reputation. It is because of this lack of structural independence that the International Association of Ombuds does not admit the office as a member.”

Major Sars “failings” singled out by the ombud, based on complaints, include:

• Sars issuing duplicate income tax numbers under one identity number. “This adversely impacts on the affected taxpayers, particularly those who are waiting for their severance pay or lump sum payout, as their employers experience difficulties in applying for a directive. The Sars system should be able to detect when there is already an issued tax reference number for the applicant ID, thus automatically declining any application related to the affected ID number.”
• Sars levying administrative penalties on taxpayers who are not required to submit income tax returns as they are earning below the set threshold. “The office has received a number of complaints about this from various taxpayers, indicating that the matter is serious and systemic. It is unfair to expect these taxpayers to follow the remission or objection processes in order for Sars to remit these unwarranted administrative penalties.”
• Sars holding taxpayers who were victims of identity theft liable for the tax debt of other people fraudulently using their ID number, “even in instances where Sars was aware of the alleged fraud and was investigating”.
• Sars requesting information during the audit, verification or objection process and then taking decisions without taking the information submitted by the taxpayer into account.

To lodge a complaint against Sars, send an e-mail to complaints@taxombud.gov.za, phone 0800 662 837 or send a fax to 012 452 5013