TAX OMBUD’S REPORT ON THE INVESTIGATION INTO ALLEGED DELAYED PAYMENT OF REFUNDS AS A SYSTEMIC AND EMERGING ISSUE

The following article is an excerpt from our September 2017 newsletter:

The office of the Tax Ombud provides you with a fair and simple way to seek a resolution of 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.

Taxpayers have, over the years, been complaining that SARS unduly delays the payment of verified refunds. The complaints reached their pick in the period December 2016 to March 2017. Taxpayers identified certain mechanisms allegedly employed by SARS, in the implementation of the tax collection system, to cause the delay. They argued that, in this respect, the tax collection system was being implemented unfairly by SARS. This resulted in financial hardships to them and, in some instances, the near collapse of their businesses; in others, loss of jobs ensued.

The Tax Ombud carried out an extensive review including obtaining inputs from most professional bodies in South Africa. From this review, it became clear that the system allows for SARS to unduly delay the payment of verified refunds to taxpayers in certain circumstances. This has become a systemic issue. The system does not sufficiently protect taxpayers. The removal of the obstacles discussed in the Report, as well as any others, would go a long way towards addressing the problem.

SARS in its response to the Ombud’s findings says:
“It is unfortunate that the Tax Ombud has arrived at the conclusion
that the obstacles are systemic in their nature, as they are the
exception rather than the rule.”

Let’s hope that SARS takes heed and that such practices as reported by the Ombud are discontinued and the process of refunds is administered in a just and equitable fashion. If you are experiencing any problems with refunds please do not hesitate to contact us for professional assistance in this regard.
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