New rules for resolving tax disputes with the South African Revenue Service (SARS) have been implemented as of March 2023. According to Danielle Luwes, Tax Manager at Hobbs Sinclair, a tax specialist firm, these changes will have a significant impact on both taxpayers and the revenue authority. The new rules include an extension of time periods, amendments to the objection process, and updates to the appointment of Alternative Dispute Resolution (ADR) facilitators.
Extension of time periods
Under the new rules, if the timelines for various procedures are not already regulated by the rules, the parties (taxpayer or SARS) can agree to shortened periods. The 2014 rules allowed for extensions only.
Objection against an assessment
A notice of objection (NOO) must be delivered by a taxpayer within 80 days (30 days under the 2014 rules) of the date of the assessment. If the taxpayer requested reasons, the NOO must be delivered within 80 days of the delivery of either the SARS notice that adequate reasons have been provided or the SARS letter with the reasons requested. The 80-day period excludes the additional 30-day extension that a taxpayer may request on reasonable grounds, and exceptional circumstances may warrant an extension of up to three years.
Appealing on new grounds
Under the new rules, a taxpayer may appeal on a new ground not raised in the NOO, unless it is a new objection against a part of the assessment not previously objected to.
Appointment of an ADR Facilitator
The facilitator must have appropriate tax experience and be acceptable to both SARS and the taxpayer. Once the facilitator is accepted by all parties, a senior SARS official appoints the facilitator within 15 days of the ADR commencement date. The facilitator must act independently and impartially.
Delivery of the Facilitator’s Report
The facilitator is required to deliver a report within five days of a meeting and a final report within 10 days after the ADR process ends.
New grounds in the statement of assessment and opposing appeal
SARS must provide a statement explaining why they made the assessment and why they oppose the appeal. Rule 31(3) has been amended to allow SARS to add new grounds for disallowing the objection, unless it changes the basis of the assessment entirely or requires a new assessment to be issued.
Subpoenas of witnesses to the Tax Board and Tax Court
The new rules allow a person to be subpoenaed by the Tax Board clerk or the Tax Court registrar to attend the appeal and give evidence or provide documents on issues relevant to the appeal. If a party thinks the subpoena is irrelevant or unreasonable, they may approach the Tax Court for relief.
It is essential to be aware of your rights and responsibilities as a South African taxpayer when it comes to taxation. Being informed of these changes and seeking advice from a tax practitioner who is up to date with tax law, policies, and procedures is crucial. As Luwes emphasises, “Knowledge is power when it comes to taxation.” Remember to exercise your rights and take the necessary steps to ensure a fair and just resolution of your tax dispute with SARS.
