Tax ombud's office matures with time

Tax Deliberation: Professor Thabo Legwaila, Faith Ngwenya, Judge Bernard Ngoepe, Joon Chong (moderator) and Advocate Eric Mkhawane participate in the Tax Indaba at the Sandton Convention Centre. (Photo: Musa Rapuleng)

Tax Deliberation: Professor Thabo Legwaila, Faith Ngwenya, Judge Bernard Ngoepe, Joon Chong (moderator) and Advocate Eric Mkhawane participate in the Tax Indaba at the Sandton Convention Centre. (Photo: Musa Rapuleng)

At a panel discussion at the annual Tax Indaba on Tuesday, Tax Ombud Judge Bernard Ngoepe, who has been at the helm since the office’s inception five years ago, discussed some of the challenges taxpayers and his office experience daily.

These mostly centre around the interaction between the South African Revenue Service (Sars) and the ombud’s office, as a new relationship was being forged.

He and fellow panelists, Ombud Chief Executive Officer Advocate Eric Mkhawane, Thabo Legwaila, a professor of Mercantile Law at the University of Johannesburg, and Technical and Standards Executive of the South African Institute of Professional Accountants (SAIPA), Faith Ngwenya, tackled a few issues including the amendment of section 16(1) of the Tax Administration Act, which will ease the operations of professional tax practitioners and taxpayers.

An official from Sars, who was in the audience, admitted that the relationship between Sars and the ombud had many challenges at the beginning, but are now “finding each other”.

“We might have had a number of disputes along the way, but with time we are maturing together,” he said.

Ngoepe, who admits that the tax ombud’s office is fairly new, said the office needs to be strengthened in terms of the mandate it carries which currently is mainly to investigate the complaints of taxpayers.

He said his office needed more power to deal with systemic problems at Sars that are often raised via taxpayer complaints.

Taxpayers, on the other hand, need to know when to approach them and when to go via other Sars channels.

“The most problematic aspect with regards to the office is the restrained ability to investigate complaints. Whereas it can receive and investigate each complaint by taxpayers, it is somewhat restrained from launching investigations into what we call a systemic problem at Sars. That is the kind of thing that affects a large number of people and which is associated with the manner in which Sars generally works.

“My issue is that the tax ombud should have that right. Once you receive a large number of similar complaints, you should be able to investigate as to whether or not there is a systemic problem. We have proposed that the law should change so that the tax ombud can initiate such investigations,” said Ngoepe.

Currently such investigations need prior approval by the minister of finance. He said that this could lead to pressure and frustration where the answer from the minister is not timeous enough for a tax practitioner dealing with an agitated client.

He also said the office of the ombud needs financial independence, so that their finances are not attached to those of Sars.

“How do you begin to be a watchdog over an institution, but they control your money?”

Ngoepe said that because it is a new office it still has some challenges to overcome, but the process is ongoing.

“We have engaged with the treasury and the minister with regard to what status the office should enjoy, he said and he is confident there will be an improvement.

However, Ngoepe said they are not able to do everything on their own.

He said the public needs to be educated on what the office does and how it works. He said while the nature of complaints do vary, many people still have no understanding of the exact mandate of the ombud’s office.

According to the ombud’s website: “The office of the tax ombud provides you with a fair and simple way to seek a resolution for a service, procedure or administrative dispute you have already unsuccessfully tried to resolve through Sars. The Office of the Tax Ombud is independent of Sars.”

Ngoepe said the mandate of the ombud is clear: “It is not to prioritise Sars over the taxpayer. As an institution that operates in the tax and tax recourse sphere, we need to be vigilant, respecting and protecting the rights of taxpayers. We are optimistic that the long awaited TBOR [Taxpayer Bill of Rights] will become a reality sooner rather than later so we can continue strengthening the country’s tax administration system.”

“What is important is to understand when to approach the office of the tax ombud and the how part. Sometimes people tend to believe any complaint can come to us. However, it is not everything, it is that which falls within the mandate. We cannot overstep our mandate. Our mandate is defined, so we must stick to it,” concurred Mkhawane.

Regarding the improved Sars Service Charter, the office of the ombud said it “gives us another opportunity to place the taxpayer at the centre of what we do by improving and aligning our internal process”.

“The Service Charter clearly states what the taxpayer should expect from Sars regarding services, fair treatment, constitutional rights and privacy, to mention just a few. It also deals with obligations,” said Ngoepe.

He said that every taxpayer should not only familiarise themselves with the contents of the charter, but should also fully comprehend what it means and that his office would be there to ensure that Sars lives up to the declaration contained in the charter.

For example, anyone writing to Sars should receive a response within 21 days. After the 21 days, the taxpayer is allowed to complain; but only after exhausting Sars’s internal remedies.

Ngoepe said the charter could have been written more comprehensively and better, but nevertheless, it is good start for the taxpayers.

“It is a living document, it evolves with time. It is useful in that you are able to hold Sars accountable against what they commit themselves to do. In the service charter you must be able to say what you offer. And how you will treat people.”

Though Mkhawane admits to a few bottlenecks in the system, but in the main the system has improved from what it was five years ago. He said the ombud is committed to improving its service.

Ngoepe, who was involved in the drafting of the South African Constitution at the dawn of democracy, said that in this country there is a culture of non-compliance when it comes to law.

“You may have the best constitution in the world, as we are, but that cannot be the last story. The interpretation of it is important.”

“It is important that people be educated about the Service Charter Sars themselves produced and distribute, but also about the obligation because every right goes with an obligation or responsibility,” he said.

Currently, there is only one office of the ombud in Pretoria, but Ngoepe vows to make a footprint in every province, meaning that each province should at least have one office.