The Tax Ombud has helped the top ten taxpayers save approximately R450-million in the last year with its intervention in the South African Revenue Service (Sars), said tax ombud retired Judge Bernard Ngoepe.
However, the ombud still has a long way to go, Ngoepe told over a hundred delegates at the launch of the 2017/2018 Tax Ombud annual report at the Fire & Ice Protea hotel in Menlyn, Pretoria on Tuesday.
The office was established in 2013 to enable South Africans to air and resolve their grievances with regards to service, procedural or administrative issues against Sars, Advocate Eric Mkhawane, the CEO at the Office of the Tax Ombud, told the Mail & Guardian.
Mkhawane described the resolution of complaints as the “heartbeat of the Office of the Tax Ombud”. In the financial year ending March 2018, the ombud received 3637 complaints, of which 1945 fell into the ombud’s mandate. The remainder of the complaints were either terminated (446) or rejected (1692).
The majority of the complaints against Sars (65.65%) came from Gauteng, followed by the Western Cape at (14.15%) and KwaZulu-Natal (10.03%).
Ngoepe said that 53.77% of complaints came of individual taxpayers, while tax representatives accounted for 46.23%.
A challenge for the Office of the Tax Ombud is to encourage South Africans to bring their grievances to the ombud, Mkhawane explained. Its services are free and are designed to be easy to access “without taxpayers having to visit the office”.
Another concern was the delays it took for Sars to finalise taxpayer complaints, which the ombud fears may “materially diminished taxpayer’s confidence in the tax administration system.”
However, the Ombud’s annual report noted there was a lack of awareness and understanding among taxpayers about Sars’ internal complaints procedures, which led taxpayers to submit complaints prematurely to the Office of the Tax Ombud.
According to the ombud, taxpayers must first “exhaust Sars’s internal resolution mechanism” before approaching the ombud. The ombud will then decide whether there is compelling evidence based on section 18(5) of the Tax Administration Act to review the complaint.
The ombud noted a 99.79% success rate with Sars implementing the ombud suggestions.
“Over the past five years, this Office has created some confidence in taxpayers as to the fairness they can expect to receive from the tax administration system,” Ngoepe said.
But he said that more South Africans would pay their taxes if they trusted that their money would be put to good use and not collected for the benefit of a few who are politically connected.
“We all know that the country is experiencing serious financial challenges, with tax avoidance exacerbating the problems and limiting the government’s ability to provide services to the public,” Finance Minister Nhlanhla Nene wrote in the annual report.
“Taxpayers in particular, and the populace in general, need to know that an institution of government mandated to collect taxes on behalf of the state does so diligently yet without trampling on their rights.”
Ngoepe said he hopes that the Tax Ombud with the co-operation of Sars will be able to to solve systemic issues such as the speed at which taxpayers are refunded at the revenue service.