Sars modernises tax, customs

Pretoria - Minister of Finance Pravin Gordhan on Friday introduced three sets of draft legislation aimed at modernising South Africa's taxation and customs administration.

Important new features in the Draft Tax Administration Bill are that:

• the gathering of comprehensive information can now be broadened;
• the media may not publish any "illegally disclosed information"; and
• the South African Revenue Service (Sars) is obliged to provide reasons for an assessment that differs from a return.

Edward Nathan Sonnenbergs tax director Dr Beric Croom says Sars has taken the rights of taxpayers into consideration when drawing up the legislation.

He has been intimately involved in the process and says the rights of taxpayers have not been 'unfairly' encroached upon.

But he is concerned that premises may be occupied and documents seized without a warrant.

Sars's defence is that it does so only in extreme cases where a shredder is already operating when officials arrive.

The long waits for decisions from the tax courts have been curbed by the imposition of a 90-day deadline. In future all tax decisions must be published, whereas they previously needed a judge's approval.

Gordhan says the objective of the amendments is also to lighten the burden of doing business and paying tax.

At the same time Sars will improve its risk-management systems. He says the relationship between the receiver of revenue, customs authorities and taxpayers is overly hostile.

A foundation needs to be laid for greater consultation and discussion.

Kosie Louw, head of legal and policy affairs at Sars, says the Tax Administration Bill involves part of the rewriting of the Income Tax Act.

A full quarter of the administrative portions of the Income Tax Act also constitute part of this Bill.

According to the Bill, greater powers will be available only to senior Sars officials.

In terms of the new Tax Administration Act, taxpayers will be entitled to an audit progress report and a letter explaining the outcome.

Audit and criminal investigations must be separated so the taxpayer can exercise "his rights as an accused".

Stiaan Klue, chief executive of the South African Institute of Tax Practitioners (Sait), says he supports the fight against tax evasion.

But he cautions that legislation should not jeopardise constitutional rights. Drastic legislation that taxpayers regard as "too draconian" can have an effect opposite to that envisaged by the legislation.

The Draft Customs Control Bill and Draft Customs Duty Bill have been opened for comment until February 26 next year.

Sars Commissioner Oupa Magashula points out that the Customs Act was last amended in 1964.

The way in which companies do business has since changed dramatically and Sars legislation needs to be adjusted accordingly.

- Sake24.com

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