Taxpayers who disagree with SARS on any matter – whether it is income tax or VAT – will welcome changes to the service’s dispute management process which were introduced on 15 May 2017. This is according to Ilsa Groenewald, Associate Director for tax at the Durban office of international audit, tax and advisory firm, BDO South Africa.
“Now, if taxpayers are aggrieved by an assessment, they or their tax practitioners can make an online request for SARS’ reasons for the assessment,” Groenewald said. “This is when the grounds provided in the assessment do not sufficiently enable the taxpayer to understand the basis of the assessment and to formulate an objection.” The new dispute management process only applies to personal income tax, company income tax and VAT, Groenewald said.
She explained that a huge advantage of the new process is that, as soon as the system identifies that a valid Request for Reasons has been submitted, an automated extension will be granted. Another significant benefit to taxpayers is that they are now able to submit a Request for Reasons, Notice of Objection (NOO) or Notice of Appeal (NOA) after the period prescribed by the dispute resolution rules had lapsed. “Prior to the introduction of the new separate workflow, the condonation process was included in the actual dispute process,” Groenewald said. “This meant that taxpayers or their tax practitioners found it very difficult to determine the next step after their original objection or appeal was not successful.”
“The new automated process allows SARS to attend to the request for late submission before the dispute or Request for Reasons case can be created. This means that, should a late submission of NOO or NOA be submitted to SARS, the taxpayer or tax practitioner will be prompted to provide reasons for the late submission.”
“In short, the new process will inform the taxpayer up front that the submission is late instead of classifying the dispute as invalid,” Groenewald said.
Another enhancement on the new system is a function that allows the taxpayer to request the suspension of payment of VAT until the outcome from SARS is known. This function has been in place for personal and corporate income tax since 2015.
“SARS has succeeded in formulating an entirely guided process via e-filing that will ensure that any dispute is submitted according to legislative requirements,” Groenewald said. “This will streamline the process and eliminates invalid disputes submitted to SARS. It will also improve SARS’ tracking and management system.”