Tax Administration Act : fulfilling human rights through efficient and effective tax administration

• Date: 01 July 2018
• DOI: 10.10520/EJC-10708c8388
• Pages: 1-16
• Published date: 01 July 2018
• Author: Fareed Moosa
• Record Number: dejure_v51_n1_a2

1

Tax Administration Act: Fulfilling human

rights through efficient and effective tax

administration

Fare ed M oosa*

BProc LLB LLM LLD

Head of the Department of Mercantile and Labour Law, University of the Western

Cape

OPSOMMING

Die Wet op Belastingadministrasie

Openbare finansies is noodsaaklik vir doeltreffende bestuur ter vestiging

van wet en orde, vrede en voorspoed, fasilitering van die heropbou- en

herontwikkeling van nasionale infrastruktuur, en die verstrek van toegang

tot sosiale goedere. Doeltreffende en effektiewe belasting administrasie is

’n noodsaaklike pilaar van 'n moderne, demokratiese staat. Hierdie artikel

toon dat die Belasting Administrasie Wet 28 van 2011, op die keper

beskou, gemik is op die bevordering van die openbare belang. Die kern

van sy doelstellings is om seker te maak die doelmatige en doeltreffende

invordering van belasting geskied. Hierdie doel is versoenbaar met die

Grondwetlike doel van doeltreffendheid in openbare administrasie –

waarvan belasting administrasie ’n integrale deel vorm. Verder is die

doelstellings van die Wet op Belasting Administrasie konsekwent met die

Wet op die Suid-Afrikaanse Inkomstediens, 34 van 1997 wat meld dat

SARS se doelwit die effektiewe en doeltreffende invordering van belasting

is. Die Wet op Belasting Administrasie bevorder sodoende die Grondwet se

onderliggende doelstellings. Dit is duidelik sigbaar daarin dat hierdie Wet

gerig is op die verseker van voldoende openbare hulpbronne vir gebruik in

die openbare voordeel. Hoewel hierdie strewe ’n legitieme regeringsdoel

is, bly elke bepaling in die Wet nogtans onderhewig aan ’n ondersoek van

rasionaliteit en, dus, geldigheid.

1Introduction

The Constitution, 1996 embodies the ideals bonding South Africans who

must cohere and transcend their divisions to change the condition of

peoples’ lives by reconstructing a South African society dogged by

corruption and maladministration in the public sector, as well as various

social ills (such as, poverty and inequality). Section 7(2) of the

Constitution obliges the State to “respect, protect, promote and fulfil” the

How to cite: Moosa ‘Tax Administration Act: Fulfilling human rights through efficient and effective tax

administration ’ 2018 De Jure 1-16

http://dx.doi.org/10.17159/2225-7160/2018/v51n1a1

* This article is an extraction of the writer’s LLD thesis titled “The 1996

Constitution and the Tax Administration Act 28 of 2011: Balancing efficient

and effective tax administration with taxpayers’ rights”.

2 2018 De Jure

rights entrenched in the Bill of Rights. To do so necessitates that the

government has sustained access to adequate finance. Financial

constraints in the public treasury will hinder the State’s ability to achieve

social justice through the fulfilment of, inter alia, socio-economic rights.

Unless the problem of strained governmental resources is overcome, the

aspiration of a fully transformed society with human dignity, freedom

and equality for all will have a hollow ring.1 Finances derived from taxes

are, thus, crucial. Success of the social transformation project hinges on

the efficiency and effectiveness of tax collection by the South African

Revenue Service (SARS). Inadequacy in public finances will hamstring

the South African government’s ability to fulfil the human rights of its

people which, in turn, will give rise to cries that the government is failing

in its duty under the Constitution to perform all constitutional obligations

“diligently and without delay” (s 237).

In view of the foregoing, the imposition of national taxes and the

enforcement of prompt and honest payment thereof are matters of

national importance. Proper tax administration maintains a regular

income stream that will keep the government and its functionaries

continuously liquid, solvent and operational. The level of tax collection is,

thus, a critical determinant of the quantum of funds that can be mobilised

for government measures aimed at transformation. Equipping tax

administrators with adequate powers that give them bite to optimise tax

collection, serves SA’s national fiscal interest. To this end, the Tax

Administration Act 28 of 2011 (TAA) is important. Whilst it vests SARS

with various pre-existing legal and administrative powers, it also grants

extraordinary new powers, some of which place SARS on a collision

course with taxpayers’ fundamental rights entrenched in the Bill of

Rights. To defend their rights against onslaught and diminution,

taxpayers affected by tax administration occurring in terms of the TAA

may attack the validity of the TAA itself, or the TAA provisions that confer

wide-ranging powers on SARS and/or other officials that limit taxpayers’

rights.

2 Problem statement and objective of the article

South Africa’s tax system is somewhat complex owing to its sprawling

legislative infrastructure. Historically, each tax statute dealt with its own

procedures, duties and remedies. This created high levels of duplication

across statutes. Whilst some statutory provisions were identical, others

differed to varying degrees. This caused confusion in interpretation and

application that contributed to increased tax related disputes, thereby

rendering tax administration more convoluted and expensive. In his

2005 Budget Review, the Minister of Finance announced that a single,

comprehensive statute would be passed that eliminates this overlapping

by aligning and consolidating generic administrative provisions

1Azanian People’s Organisation v President of the Republic of South Africa

1996 4 SA 671 (CC) para 43.