The Tax Ombud’s Office came into effect in the second half of 2013. Recently the Ombud’s first full year annual report was released.
What is the role of the Ombud?
The Ombud deals with service problems and administrative and procedural complaints only. Taxpayers need to have exhausted existing SARS dispute channels before contacting the Tax Ombudsman.
The annual report – what the stats show
The Ombud’s Office had 6,003 communications with taxpayers of which 1,270 were complaints. 861 complaints were outside of the mandate of the Ombud or were premature for not having exhausted SARS’ procedures first, with only 409 taken on. Only 16% of all complaints were lodged by registered tax practitioners on behalf of taxpayers. More than 75% of accepted complaints were resolved in the taxpayer’s favour.
This is good news and bad news. The bad news is there is clearly ignorance by taxpayers as to the Ombud’s role and the SARS internal complaints procedure. One can assume that in many of these cases, all dispute channels with SARS had not been used. Furthermore it is worrisome that many tax practitioners appear not to be using the Tax Ombud, whether out of ignorance or choice, both to the detriment of their clients. It will be interesting in future years to see if both these improve.
The 75% resolving of disputes in the taxpayer’s favour underlines the importance of the Ombud and indicates the Ombud is operating independently of SARS.
The main areas of dispute
- Withdrawal of assessment as the prescription period had lapsed. Taxpayers took too long to object to assessments and were not aware they could still reach an agreement with SARS.
- Delayed refunds. These flowed from incorrect banking information held by SARS or given to SARS, verification audits and system problems at SARS.
- Identity theft. The victim was a taxpayer whose tax account was used to generate a fraudulent claim which SARS paid out.
- SARS officials not complying with the stipulated time periods with objections and appeals. The Ombud found there is frequent disregard of these time frames by SARS officials.
- Outcomes of objections and appeals were not properly implemented.
- SARS did not respond or help taxpayers
The Ombud is performing a valuable service for taxpayers. Don’t be afraid to use it.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)