Publications
Partners
The Tax Ombud says the number of complaints referred to it has "grown exponentially" since the office was established in 2013, stretching resource capacity.
According to statistics revealed in the 2017/18 annual report of the Office of the Tax Ombud, Gauteng recorded the highest number of tax-related complaints, followed by the Western Cape and KwaZulu-Natal.
Most complaints were about late payments of refunds, something the office said "diminished taxpayers' confidence in the tax administration system".
It said a total of R446m was paid out to the top ten complainants about VAT and Corporate Income Tax refunds, following intervention by the ombud.
The highest single VAT refunds paid were R158m and R90m respectively.
Although the largest payments were for business-related tax refunds, most complaints came from individual taxpayers, something the office attributed to lack of knowledge about existing internal complaint resolution channels at the South African Revenue Service (SARS).
"The complexity and variety of complaints we receive has changed substantially since the Office of the Tax Ombudsman opened its doors in October 2013," said a statement.
In the early days of the office, there were few complaints regarding customs-related matters. However, reports to the office now involve delays by SARS in responding to applications for tariff codes or about cargo being held at border posts, the ombud said.
"We are also starting to see more tax complaints from major companies, including multinationals, which are highly complex in nature," said the report.
Common issues leading to delay of refunds by SARS:
- Using historical returns to delay the payment of refunds;
- Refunds for one period being withheld while an audit/verification is in progress for another period;
- Using historical returns to delay the payment of refunds;
- Requesting further information which was previously requested and submitted during audit;
- Assessments successfully disputed, but refund still not paid out;
- Raising assessments prematurely.
The late payment of tax refunds has cropped up at the Nugent Commission of Inquiry probing tax and governance issues at SARS.
The CEO in the office of the Tax Ombud, Eric Mkhawane, testified that delays potentially led to inflated tax revenue, as some payments were carried out to the next financial year.
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER
