The South African Revenue Service (Sars) kicked off its national dispute resolution roadshow in Johannesburg on Tuesday.
The roadshow will consist of a series of half-day seminars aimed at demystifying Sars’s newly formalised fast-tracked approach to tax-dispute resolution.
In line with the government’s objective to develop a tax administration that meets global standards and Sars’s goal to improve internal processes and clarify legal uncertainties, new tax-dispute resolution legislation came into effect on April 1 2003.
The new legislation deals with all tax assessments, objections and appeals to assessments lodged by taxpayers on or after April 1 2003.
Sars assistant general manager of enforcement, Mark Kingon, says Sars is embarking on the roadshow to make a highly complex legal procedure more understandable to accounting, audit, legal and tax advisers.
He says the new dispute-resolution rules are a lot more detailed and prescribe the procedures for lodging objections and appeals, how hearings before the tax courts should be conducted, as well as conditions prescribing the circumstances under which tax disputes may be settled.
“With the exception of customs and excise, the new tax-dispute rules and procedures apply to all South African tax legislation administered by Sars, including marketable securities, transfer duty, estate duty, stamp duty, value-added tax and uncertificated securities tax, skills development levies, unemployment insurance contributions and tax on retirement funds,” Kingon says.
Kingon says before the introduction of Sars’s new tax-dispute resolution rules and the launch of the Sars service monitoring office in October last year, taxpayers and tax professionals complained that disputes over tax assessments took too long to resolve — sometimes a number of years.
He says Sars’s dispute resolution is now driven by a specific timeframe where Sars must deal with a lodged objection within 60 days.
Commenting on one of the major differences between the new and old tax-dispute resolution rules, Kingon says the new rules make provision for alternative dispute resolution (ADR) procedures and discussions, where disputes can be settled outside the litigation arena.
“The ADR process will be cheaper, less formal than the traditional court process and will dramatically reduce the time normally taken to resolve substantial tax disputes. The process must be concluded within 90 days,” he says.
According to Kingon, the taxpayer can choose to refer a matter to ADR, the tax court or a special board. If a matter is referred to ADR, the taxpayer retains the “right” to have the matter adjudicated by the tax court or a special board.
Following the Johannesburg event, Sars officials will address accounting, audit, legal and tax advisers in other major business centres over the next four weeks. — I-Net Bridge