Information-gathering by SARS under the TAA : trumping the taxpayer's right to tax finality - part II

• Jurisdiction: South Africa
• Author: Milton Seligson
• DOI: 10.10520/EJC190601
• Published date: 01 June 2016
• Date: 01 June 2016
• Pages: 6-16
• Published By: Siber Ink

6© SIBER INK

Information-gathering by

SARS under the TAA:

TRUMPING THE TAXPAYER’S RIGHT TO TAX

FINALITY — PART II

MILTON SELIGSON SC

ABSTRACT

The first part of this article, which appeared in the March 2016 issue of the

BTCLQ, explored in depth the nature and extent of SARS’s powers under

the Tax Administration Act, No 28 of 2011 (‘the TAA’) to gather informa-

tion from taxpayers in connection with their tax affairs, as well as the limita-

tions imposed on the exercise of such powers. The article concluded that

the breadth of SARS’ powers under the TAA to gather ‘foreseeably relevant’

information from taxpayers, requiring only a reasonable possibility that the

requested information will prove relevant, opens the way to potential abuse

of its powers by SARS, or at least to protracted delays in finalising a taxpayer’s

tax position.

Based on an analysis and interpretation of the relevant statutory provi-

sions, it was accepted that SARS’s information-gathering powers under the

TAA in effect ‘trumped’ the taxpayer’s right to tax finality. However, the article

pleaded for a more efficient, expeditious and systematic approach to infor-

mation-gathering by SARS, with the aim of minimising delays and promoting

the genuine interests of taxpayers in their quest for tax finality, without preju-

dicing tax collection.

Part II of the article which appears in this issue of the BTCLQ contains a

discussion of a range of specific problems that may well be encountered by

taxpayers in relation to the exercise of its information-gathering powers by

SARS. The article analyses how these issues are likely to be resolved in the light

of the relevant provisions of the TAA and with reference to pertinent judicial

decisions. This analysis indicates that, though the TAA may load the dice in

favour of SARS, taxpayers are entitled to expect that SARS will perform its

duties diligently and without unreasonable delay. It also shows that there are

limits to the far-reaching powers conferred by the TAA.

Part II of the article reiterates the call for SARS to assist taxpayers in

achieving tax finality by using its information-gathering powers under the

TAA as efficiently and expeditiously as possible.

Introduction

There are likely to be a multiplicity of issues that will confront taxpayers

when faced with a request(s) for relevant material, or the conduct of an

investigation or audit by SARS, pursuant to its information-gathering

powers under the Tax Administration Act 28 of 2011 (‘TAA’). As the TAA

has been in force only since 1 October 2012, there is a paucity of case law