New tax dispute resolution rules bring relief for taxpayers

Taxpayers now have an opportunity to take about three and half months from the date of assessment or decision to lodge an objection with the South African Revenue Service (Sars).

Minister of Finance Enoch Godongwana recently approved the new dispute resolution rules with immediate effect under section 103 of the Tax Administration Act, 2011.

Tax relief

This means that under the new rules, taxpayers can take up to 80 business days from the date of assessment or decision to lodge an objection, as opposed to the 30 business days period under the old rules.

Objections and appeals

These Rules prescribe the procedures in lodging objections and appeals against assessment or decision, procedures for alternative dispute resolution, conduct and hearing of appeals, application on notice before tax court and transitional rules.

Taxpayers have in the past raised concerns that the period permitted to deliver an objection is not sufficient, which makes it impossible for the taxpayers to formulate their objection considering the length of time Sars takes to complete an audit.

While the new rules presumably provide taxpayers with sufficient time to formulate their grounds of objection, we caution that this extension by a further 50 business days is not a ticket for taxpayers to be reactive or delay in dealing with Sars dispute.

A good rule of thumb is that taxpayers should deal with all correspondence received from Sars immediately.

Strategic objectives

He points out that the step to extend the period of filing the objection by a further 50 business days appears to be aligned to Sars’s strategic objectives, which seek to provide clarity and certainty and make it easy and seamless for taxpayers and traders to comply with their obligations.

The new rules also came with transitional measures and provide actions for specific requests in respect of procedural matters taken or instituted under the old Rules but not yet completed before the new rules came into force.

The transition of new rules means:

• Where the assessment or decision was issued or made before 10 March 2023 and 30 business days from that date expired before 10 March 2023, then the taxpayer is trapped by the old rules and must request for condonation under Rule 68 (1) and (3) of the new rules.

• Where the assessment or decision was issued or made before 10 March 2023 and 30 business days from that date expire after 10 March 2023, then the taxpayer has an additional 50 business days to lodge the objection without having to request for condonation.

• Where an assessment or decision was issued or made after 10 March 2023, the taxpayer has 80 business days from the date of the assessment or decision to lodge an objection.

• While the new rules presumably provide taxpayers with sufficient time to formulate their grounds of objection, we caution that this extension by a further 50 business days is not a ticket for taxpayers to be reactive or delay in dealing with Sars dispute.

Further information can be found in the Government Gazette published in March 2023.

Josias Montjane is tax advisory senior manager at SNG Grant Thornton.

This article first appeared on Moneyweb and was republished with permission. Read the original article: Relief for taxpayers