New tax law 'may abuse power'

2012-06-20 12:45

Cape Town - The promulgation of the Tax Administration Bill is set to have serious and significant ramifications for taxpayers, an expert said on Wednesday.

It would grant the SA Revenue Service (Sars) the power to search and seize relevant material without the need for a warrant, said Edward Nathan Sonnenbergs (ENS) tax executive Beric Croome.

He said the bill was expected to come into effect within the next four to six weeks.

It was likely that certain parts of the legislation would take effect on different dates, as it would be extremely difficult to put all of it into effect immediately, he said.

One of the most significant and controversial elements of the new bill was the provision of search and seizure powers that would be granted to Sars, enabling it to have the power to search and seize suspect materials without a warrant.

"Sars has a duty to uphold the tax laws of South Africa. Previously, if serious tax evasion (was) identified during a Sars audit, there was no power to seize documents which would have assisted Sars immediately, with the result that the evidence was likely to disappear by the time a warrant was eventually granted."

Croome said while the new powers were expected to assist Sars in carrying out its duties, there was also a concern about the possibility of abuse of this power.

"There was a proposal that any documents that are seized by Sars without a warrant should then be given to the court, which would then determine whether access to these documents should be granted; however, this was not accepted."

While these new powers were controversial, the establishment of a Tax Ombud in the new bill was a positive move.

"We welcome the appointment of an ombud to deal with tax affairs; however, for this to be successful, the appointment will be critical."

The Tax Ombud should have a good background in both customer service and law.

The fact that the Tax Ombud would also be accountable to the minister of finance, and not to the commissioner, should help to alleviate concerns.

"This is similar to the model that has been adopted in Canada and the United Kingdom and should help to create a level of independence."

The Tax Ombud would be paid out of Sars' budget, which had been criticised, but it was a step in the right direction, Croome said.

ENS director Ernie Lai King said the value or success of the ombud would depend heavily on the character of the person appointed.

"Hopefully, this appointment will assist in the process of dealing with disputes arising from tax issues and not prove to be yet another layer of administration," he said. 

  • fussed.anderson - 2012-06-20 13:37

    Start with all MP's in gov. That will keep them busy for the next 20 years

  • rickvcooper - 2012-06-20 13:38

    The state will never protect the people it is supposed to serve, from itself.

  • Trevor - 2012-06-20 13:50

    When they start this then it's a one way street. As soon as your civil liberties are infringed on for WHATEVER reason then, we are no better than the National Party, you can justify anyway you want, they did exactly the same thing....ANC=NP..nothing new

  • rasthami.m1 - 2012-06-20 15:11

    I thought this was revised since its introduction its a totally violation of privacy legalized -tax ombudments with limited powers most of the duties carried out by the tax ombudments will entirely will be serving for sars best interest not both parties

  • Bobby - 2012-06-20 15:48

    Is this not again an example of how individual rights are being eroded? This problem is probably not only confined to SA but internationally as government’s seem hell bent on citizen control and use various guises to justify their actions such as the terrorist threat, corruption and here tax evasion to stifle individuality and independence. I for one take umbrage that such sweeping powers are being given to a government department that is by the nature of its business suspicious of its clients and have a reputation for arrogance when dealing with taxpayers in general. Another point is who watches the watcher and where does the accountability begin and end? These powers will also open up a Pandora’s Box for those intent on more nefarious activities.

  • nadia.chotu - 2012-06-21 10:02

    Civil Liberties??? Constitutional Protection of Rights??? Democratic Government....... # clearly a thing of the past for SA!

  • andrew.mackie.90 - 2012-06-21 13:49

    More and more becoming a police controlled country where government does as it pleases!!

  • denny.cray - 2012-06-21 16:18

    This is absurd. This basically means taxpayers are now being treated as criminals. We are guilty until proven innocent. How long before this power is used as a flimsy pretext to go after citizens for a reason which isn't even related to tax? Goodbye section 14 of the constitution.

  • dhavandran.palavar - 2012-07-02 12:42

    i assume this will also apply to the govt officials?

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