Taxpayers: Good News in the Season of Good Cheer?
Could the “pay now, argue later” principle be repealed?
The Davis Tax Committee (DTC) has recommended that taxpayers be given a Taxpayer Bill of Rights (TBOR). Some twelve years ago, SARS drafted its first Taxpayer Service Charter but this has never been issued in final form.
Not only will it align South Africa with best practices but it will improve trust between the taxpayer and SARS, which is essential to stopping the slide in taxpayer morality.
The DTC also points out that the tax system is subject to the Constitution. In this spirit, it makes recommendations that if adopted will make taxpayers happy, such as:
- Taxpayers should only need to pay tax when any dispute has been impartially reviewed. This would do away with the “pay now, argue later” principle currently applied by SARS. This is anticipated to not only significantly improve taxpayers’ cash flows but also to bring about more fairness in the SARS/taxpayer relationship; and
- More deadlines will be specified for SARS. Currently, for example, no time limit is set for the finalisation of a tax audit. This is unfair towards taxpayers, considering the length of time that SARS audits tend to take. The DTC recommends that the TBOR be enforceable on both taxpayers and SARS.