The Tax Administration Act No. 28 of 2011 (“TAA”) which took effect on 1 October 2012 created the Office of the Tax Ombud to deal with complaints against the South African Revenue Service (“SARS”) empowering that office to deal with complaints made by a taxpayer regarding a service matter or procedural or administrative matter arising from the application of the provisions of a tax Act by SARS.
Before a taxpayer can lodge a complaint with the Office of the Tax Ombud, it is important that they have exhausted the internal complaints resolution mechanisms within SARS, unless there are compelling circumstances to do so. The TAA prescribes what constitutes compelling circumstances and those are not dealt with further in this article.
During September 2015 SARS refined the process a taxpayer must follow when lodging a complaint regarding the manner in which they have been dealt with by SARS. According to the SARS website a complaint is a grievance or some other type of dissatisfaction experienced by a taxpayer, trader or representative relating to a process, including queries, returns or any other service request or a service experience that is not adequately resolved.
The SARS guidelines dealing with complaints makes it clear that SARS’ processes should be fully exhausted to resolve a taxpayer’s query before a formal complaint is lodged. Where the taxpayer remains dissatisfied with the service after their normal interaction with SARS, they are entitled to complain against SARS. It must be noted that where a taxpayer disagrees with an assessment or any decision taken by SARS, it is necessary to follow the formal dispute resolution process and to lodge an objection against the assessment raised. The complaints process cannot deal with the merits or otherwise of an assessment issued by SARS.
Where a taxpayer is dissatisfied with SARS’ service or processes, it is necessary to have a case number first, particularly where a taxpayer wishes to complain about missing documentation, quality or speed of service or unresolved issues.
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Taxpayers are required to submit a complaint via e-filing which means that the complaint will be tracked electronically or alternatively by calling the SARS Complaints Management Office (“CMO”) on 0860121216. In order to complain via e-filing, the taxpayer must be a registered e-filer to complete and submit the complaint form. Previously taxpayers were unable to lodge complaints electronically which meant that complaints were not capable of comprehensive tracking and follow up.
Where a taxpayer is unable to file a complaint via e-filing, they may seek assistance from a SARS agent to complete the complaints form on their behalf when contacting the CMO. When lodging a complaint, a taxpayer is required to indicate the nature of the complaint and to categorise the complaint into one of the specified categories. According to the SARS website, the categories of complaints and examples relating thereto are as set out below:
“No. Category Example
1 Legal/Policy For example, debit cards not accepted for payments.
2 Employee behaviour/Competence For example, agent X was rude, or agent did not know how to assist
3 Channel experience/environment/ For example, contact centre is very slow to answer, or there is no
technical issues parking at branch X.
4 Quality and speed of service For example, incorrect resolution of request, or it took 6 months to
process my banking detail change.
5 Unresolved service/operational For example, turn-around-time exceeded and my return has not yet
matter been processed.
6 Missing or lost documentation For example, I have submitted my return, but SARS cannot find it.”
Where a taxpayer wishes to lodge a complaint relating to the quality and speed of service, or an unresolved service operational matter or missing or lost documentation, the taxpayer must submit a case number first. Thus, the taxpayer’s complaint will only be accepted if there is already a case logged on SARS’ systems and the case number is inserted on the complaints form.
SARS has indicated that once a taxpayer has complained, they will receive either a text message or email notification at various stages of the process confirming that the complaint has been received. It is intended that the resolution date will be a maximum date of 21 days after the complaint has been logged with SARS. Where the taxpayer remains dissatisfied with the outcome utilising the SARS internal complaints process, the taxpayer may lodge a formal complaint with the Office of the Tax Ombud.
SARS published a document entitled “Guide to the Complaints Functionality on E-filing” setting out how taxpayers and tax practitioners can lodge complaints via e-filing in respect of the taxpayer’s own affairs or in respect of the affairs of taxpayers managed by a tax practitioner.
Where the taxpayer remains dissatisfied after having followed the internal complaints process at SARS, they are entitled to file a complaint with the Office of the Tax Ombud, which office will determine whether the complaint falls within the mandate of that office and advise the taxpayer accordingly. The Tax Ombud intends to finalise complaints made by taxpayers within 15 business days of receipt of the taxpayer’s complaint. Where the Tax Ombud anticipates that the complaint will not be resolved within the specified time period, the Office will advise the taxpayer thereof.
The Tax Ombud recently tabled its annual report for 2014/2015 in Parliament as required under the TAA. That report indicates that during the twelve months under review, 1277 complaints were received from taxpayers, of which 861 were rejected on the basis that the complaints fell outside of the ambit of the Tax Ombud’s mandate or that the taxpayer had failed to exhaust SARS’ internal complaints process. Of the 409 complaints accepted by the Tax Ombud, 75% were resolved in favour of the taxpayer.
The Tax Ombud’s report identifies the most important categories of complaints lodged by taxpayers against SARS and these related to problems relating to the following areas:
· Withdrawal of assessments by SARS
· Delays in refunds
· Changes in banking details of taxpayers
· Identity theft
· Turn-around time on objections and appeals
· Outcomes of objections/appeals not implemented by SARS
· Debt procedures not adhered to by SARS
· Undue delay in issuing of tax clearance certificates
It must be remembered that the Office of the Tax Ombud cannot compel SARS to adhere to the finding made by the Ombud’s office but where SARS chooses not to adhere to the recommendations made by the Tax Ombud, that will be reported to Parliament. Thus, SARS must have very sound reasons not to accept the recommendations made by the Tax Ombud, particularly when reference is made to the provisions of the Constitution.
In conclusion, where taxpayers are aggrieved with the manner in which they have been dealt with by SARS officials or SARS has failed to resolve the taxpayer’s complaint properly, they are entitled to take that up with the Office of the Tax Ombud and based on experience in practice, the Office of the Tax Ombud is having the desired effect in resolving complaints made by taxpayers against SARS. Taxpayers are therefore urged to lodge complaints with the Office of the Tax Ombud once they have failed to resolve the matter utilising SARS’ internal complaints processes.
Dr Beric Croome is a Tax Executive at ENSafrica This article first appeared in Business Day, Business Law and Tax Review, November 2015.