A deceased taxpayer: ‘Juristic person’ for constitutional purposes?

• Jurisdiction: South Africa
• Date: 19 January 2021
• Published date: 19 January 2021
• Author: Moosa, F.
• Pages: 51-74

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A DECEASED TAXPAYER: ‘JURISTIC PERSON’

FOR CONSTITUTIONAL PURPOSES?

FAREED MOOSA*

Associate Professor and Head of the Department of Mercantile and Labour

Law, University of the Western Cape

Abstract

The central hypothesis of this article is that a grammatical, purposive,

contextual cum teleological interpretation of ‘person’ and, by

extension, ‘juristic person’ in section 8(4) of the Constitution of the

Republic of South Africa, 1996 leads to the conclusion that these terms

are not derived from their common-law lineage. Accordingly, it is

argued that a deceased estate is, as a statutory person for tax purposes,

imbued with constitutional personality, a species of legal personality,

separate from that of its executor. Consequently, a deceased estate

ought, as a taxpayer, to be a holder of rights entrenched in the Bill of

Rights. This interpretation underscores the Bill of Rights as a

cornerstone of democracy and enables it to live up to its transformative

pedigree. This article argues further that a contrary interpretation,

particularly for tax administration purposes, is undesirable for various

reasons: first, it would exclude constitutional protection for interests

that are deserving of protection; secondly, the common-law concept of

person would be excluded from constitutional scrutiny which is

necessary to ensure that it accords with constitutional norms and

standards; and thirdly, extending the concept of person for

constitutional purposes beyond its common-law realm will ensure that

section 8(4) is not an obstacle to transformation and equality, but

central to its achievement regarding the content of ‘juristic person’ in

its constitutional setting.

I INTRODUCTION

The South African Revenue Service (‘SARS’) is an organ of state within

public administration by virtue of section 2 of the South African

Revenue Service Act

1

and para (b)(ii) of the def‌inition of ‘organ of state’

* BProc LLB (UWC) LLM (UCT) LLD (UWC).

1

Act 34 of 1997 (‘SARSA’).

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in section 239 of the South African Constitution, 1996.

2

SARS’s primary

function ‘is the eff‌icient and effective collection of revenue’.

3

Taxes are

pivotal to achieving constitutional goals.

4

To enable SARS to combat tax

evasion and avoidance, the Tax Administration Act (‘TAA’)

5

codif‌ies a

web of powers that permit SARS to administer taxes more effectively by

gathering information: Section 40 read with section 41 confers powers to

conduct an audit, f‌ield audit, criminal investigation, inspection and

verif‌ication; sections 45 and 63 authorise warrantless inspections and

searches of premises; sections 61 and 62 permit searches with a warrant;

section 63 read with section 64 permits seizure of documents protected

by legal professional privilege. These are formidable powers which,

when exercised, may encroach on a taxpayer’s fundamental rights

entrenched in the Constitution (such as, the rights to privacy, to

property, and to just administration action).

The term ‘taxpayer’ is def‌ined in section 151 of the TAA as including

‘a person chargeable to tax’. Section 152 reads: ‘A person chargeable to

tax is a person upon whom the liability for tax due under a tax Act

6

is

imposed and who is personally liable for the tax.’ Although qualif‌ication

as a ‘person’ in the eyes of the law is important for the application of the

TAA, this term is undef‌ined therein. Under section 1 of the TAA,

‘person’ covers anyone qualifying as such under its def‌inition in a ‘tax

Act’ (as def‌ined). Section 1 stipulates: ‘In this Act, unless the context

indicates otherwise, a term which is assigned a meaning in another tax

Act has the meaning so assigned’.

The Income Tax Act (‘ITA’)

7

is encompassed by the TAA’s def‌inition

of ‘tax Act’. Under the ITA, a prerequisite for an income tax liability is

that a taxpayer must be a ‘person’ as def‌ined in section 1. There,

‘taxpayer’ is def‌ined as ‘any person chargeable with any tax leviable

under this Act’. Also, section 5(1)(c) of the ITA states that income (or

‘normal’) tax is levied on the taxable income of ‘any person (other than

a company)’. Therefore, legal personhood is important in income

2

See CSARS v Trend Finance (Pty) Ltd 2007 (6) SA 117 (SCA) para 25; Pearse v CSARS

(unreported case no 10498/11) 2012 ZAGPPHC 75 (4 May 2012) paras 49–51. Also see

Moosa, The 1996 Constitution and the Tax Administration Act 28 of 2011: Balancing Efficient

and Effective Tax Administration with Taxpayers’ Rights (unpublished LLD thesis, University

of the Western Cape, 2016) 95.

3

Section 3 of SARSA. See Moosa, ‘Tax Administration Act: Fulf‌illing Human Rights

Through Eff‌icient and EffectiveTax Administration’ (2018) 51(1) De Jure 1.

4

Kalil NO v Mangaung Metropolitan Municipality 2014 (5) SA 123 (SCA) para 6.

5

Act 28 of 2011. For a discussion of this statute, see Moosa, ‘Taxation: Constitutionality of

the Tax Administration Act 28 of 2011’ (2017) 28 Stell LR 638.

6

The TAA (s 1) def‌ines ‘tax Act’ to mean ‘this Act or an Act, or portion of an Act, referred

to in section 4 of the SARS Act, excluding Customs and Excise legislation’.

7

Act 58 of 1962.

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