Introduction
The concept of a separate and distinct Tax Administration Bill (TAB) was first mooted in the Budget review published by National Treasury at the time of the 2005 Budget. It was indicated that National Treasury was contemplating introducing a single piece of legislation to deal with all the administrative provisions contained in the fiscal statutes administered by the South African Revenue Services (SARS), except for customs and excise duties.
The draft TAB was released for public comment on October 30 20O9 and its purpose is to harmonise the administrative provisions contained in all the various fiscal statutes except, as already pointed out, customs and excise which is subject to a separate process of review and legislative amendment.
In drafting the TAB, SARS consulted with domestic tax and constitutional law experts to ensure that the Bill does not violate the Bill of Rights contained in the Constitution as amended.
The TAB comprises some 20 chapters made up of approximately 254 draft sections. Many of the provisions contained in it will be familiar to taxpayers as they are currently found in the various fiscal statutes administered by SARS. The TAB deals with the various processes taxpayers will face when dealing with SARS, ranging from the registration as a taxpayer, to submitting tax returns, receiving assessments, challenging assessments and the information-gathering powers of the Commissioner. Clearly, as South Africa is a constitutional democracy, it is important that the TAB complies with taxpayers' rights as enshrined in the Constitution.
The importance of taxpayers' rights
All legislation introduced in South Africa must uphold the Bill of Rights. While the Constitution does not specifically refer to taxpayers' rights, it is clear that taxpayers can rely on the Bill. As a result of the constitutional dispensation, all fiscal statutes must adhere to the provisions contained in the Constitution, failing which the courts could strike down legislation as being repugnant under the constitutional provisions.
The Bill of Rights, therefore, affects the powers conferred on SARS in the fiscal statutes and, more importantly, how SARS conducts itself in dealing with taxpayers.
It must be remembered also that the rights contained in the Bill of Rights are capable of being limited under a law of general application in terms of s36 of the Constitution.
That section provides that rights may be limited in certain circumstances where it is reasonable and necessary in an open and democratic society. In the tax context, the taxpayers’ right to privacy enshrined in s14 of the Constitution is important in that it protects information held by a taxpayer and prevents the state from conducting searches of premises or from seizing documents and records, unless authorised by specific statutory provisions.
s32 of the constitution confers the right of access to information, whereby taxpayers can request information about themselves from SARS and in accordance with the provisions contained in the Promotion to Access to Information Act (2 of 2000). In addition, the right to just administrative action contained in s33 of the constitution confers on taxpayers a right to request reasons from SARS for decisions made by it in its dealings with taxpayers and as more fully set out in the Promotion of Administrative Justice Act (3 of 2000).
It is important, therefore, that the provisions contained in the TAB adhere to the provisions contained in the Constitution and particularly the rights available to taxpayers.
To follow:
Part 2 (Important changes contained in TAB)
Part 3 (Remedy for taxpayers)
Croome is a tax executive with Edward Nathan Sonnenbergs. The full article first appeared in Without Prejudice November 2010 issue.
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