On 24 June 2011 the Tax Administration Bill was introduced in Parliament for public comment. This Bill is an attempt to simplify, provide greater certainty and better coherence in South African tax administrative law. These administrative provisions are currently duplicated in different tax Acts. The Bill incorporates into one piece of legislation certain generic administrative provisions. Parallel to this Bill, the rewrite of customs aspects in the Customs and Excise Act, 1962, is at an advanced stage.
The Taxation Administration Bill 2011 seeks to facilitate tax compliance, provide consistency in the application of tax law and to further improve the levels of tax compliance in South Africa.
It aims to enhance tax compliance and SARS’ powers to effect this, recognising that to maintain confidence in the integrity of the tax system, SARS is duty bound to actively pursue tax evaders. Tax evaders will face stricter enforcement, assessment and collection powers. At the same time, the Bill will cut red tape and reduce the administration burden and cost for businesses and individuals to remain tax compliant. SARS provides the example of there being a single registration for multiple tax types such as Income Tax, Employees Tax and Value Added Tax.
The proposed provisions in the Bill focus on the registration of taxpayers’, return submissions, assessment procedures, objection and appeal procedures, information gathering, search and seizure provisions, provisions relating to the secrecy of the taxpayers affairs and the processes for the payment and collecting of outstanding tax.
The Bill seeks to balance the powers and duties of SARS with the rights and obligations of taxpayers, in order to enhance equity and fairness in tax administration by providing a single body of law that outlines common procedures in a transparent relationship. The Bill also seeks to align current outdated tax administrative provisions with modern approaches, business, accounting, constitutional rights etc.
The Bill further proposes the establishment of a Tax Ombud to deal with taxpayer complaints, provide for search and seizure without a warrant under limited circumstances, providing the collection powers of SARS.
Whilst this Bill contains various provisions that will go a long way to improving the efficiency of the tax system and make the cost of doing business in South Africa cheaper, the critics of the Bill believe that it is merely aimed at extending SARS’ powers.
Should you require any additional information regarding this bill, please contact Dave Beattie on 031 582 7410 or [email protected].