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Tax Dispute Resolution Process: Current status

The tax dispute resolution process, contained in the Tax Administration Act, No. 28 of 2011 as well as the rules promulgated under section 103 of that act was designed to ensure efficient and simple resolution of tax disputes. Of late, however, our experience has been quite the opposite.

It is evident that the current economic climate has taken its toll on the tax dispute resolution process within SARS as well. SARS are, no doubt, inundated with objections, requests for reasons and appeals from taxpayers trying to save where they can and unfortunately, based on the responses being received from SARS over the last few months in relation to tax disputes,  the wheels appear to be coming off!

Objections are being declared invalid for invalid reasons, disallowed on incorrect reasons, and sometimes just figuring out what SARS is trying say in response to an objection can be challenging with the response being, plainly, an incoherent blabber, that is if a response is received at all.   Similarly, concerns raised from the tax industry with the introduction of the alternative dispute resolution process on appeal also now seems to be coming to a head with either no facilitation taking place at alternative dispute resolution hearings or failure by SARS to try and amicably resolve the dispute to close the matter.

While SARS should indeed be commended for the massive strides forward on the tax dispute resolution process to date, the current status, in our experience, does not compliment their hard work in the past.

In the current, unfortunate status of the process, taxpayers and tax practitioners may feel powerless and frustrated resulting in disputes being abandoned or otherwise not being resolved.  Having a competent team of professional tax dispute resolution experts is now more important than ever to ensure disputes are resolved fairly, efficiently and within reasonable amount of time.