Cabinet
Cabinet has approved the Tax Administration Bill for tabling in Parliament. The South African Revenue Service (SARS) released the bill for public comment in October last year.
At the time, SARS described the bill as seeking to “provide a single body of law that outlines common procedures, rights and remedies and to achieve a balance between the rights and obligations of both SARS and taxpayers in a transparent relationship”.
According to the cabinet statement, the bill benefits both taxpayers and the revenue service in two ways.
Firstly, it reduces the compliance burden on taxpayers as a result of its simplified language. Rights and duties with regard to all tax laws will be easier to understand.
Secondly, the administrative burden upon SARS will reduce over time as “unnecessary and duplicate provisions and systems are simplified and ineffective provisions are removed”.
During the drafting process, SARS reviewed the current administrative provisions contained in existing tax acts, excluding the Customs and Excise Act. The provisions were harmonised across taxes as far as possible. The tax administration laws of other countries were also taken into account.
International tax experts and local constitutional experts were roped in to lend advice.
The review process identified legislative gaps that needed to be addressed.
Proposed changes include the introduction of a framework for the single registration of taxpayers for all tax types, the granting of more powers to senior SARS officials, the extension of SARS’s information gathering powers, the provision of monthly audit reports to a taxpayer undergoing a field audit and the power to conduct a search and seizure without a warrant if a warrant cannot be obtained in time to prevent the destruction or removal of records.
The bill also seeks to ensure that all tax court judgements will be published in a way that does not reveal the taxpayers identity. This would have the effect of placing both SARS and taxpayers on an equal footing.
The proposed legislation would also create a single taxpayer account with a rolling balance. Payments could be made in instalments. Interest due or payable could also be calculated on a compound basis.
The bill contains provisions designed to help secure the collection of taxes that were in danger of not being paid. In such a case, a taxpayer’s assets could be seized for up to 24 hours while a court order was sought to prevent the sale of assets.
Sabinet Cape Town Office
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