The Tax Administration Act : what every corporate tax administrator should know (part 1)

• Jurisdiction: South Africa
• Author: Des Kruger
• DOI: 10.10520/EJC174134
• Published date: 01 June 2013
• Date: 01 June 2013
• Pages: 1-11
• Published By: Siber Ink

1

© SIBER INK

The Tax Administration Act

WHAT EVERY CORPORATE TAX

ADMINISTRATOR SHOULD KNOW (PART 1)

DES KRUGER1

ABSTRACT

The Tax Administration Act, 2011 (‘the TAA’), which came into effect from

1 October 2012, has done far more than merely consolidate the overlap-

ping administration provisions in the various tax Acts. There are significant

new changes that need to be mastered by the corporate tax administrator.

This article seeks to highlight those new (and previous) administrative rules

that impact most on corporate taxpayers. The TAA is a complex body of law

and there are many changes that impact corporate tax administrators. It is

therefore not possible to deal adequately with all these changes in one article.

Subsequent articles will accordingly consider those issues that have not been

canvassed in this article.

INTRODUCTION

The Minister of Finance announced in his Budget Speech as long ago as

2005 that consideration was being given to incorporating in one piece of

legislation certain generic tax administration provisions that were then

duplicated in a number of tax Acts. This initiative subsequently led to the

enactment of the Tax Administration Act 28 of 20112 (‘the TAA’), but its

implementation was delayed for about a year and the provisions came into

effect only on 1 October 2012.3

However, while the provisions of the TAA that relate to the accrual of

interest in respect of an understatement penalty or jeopardy assessment

have commenced,4 the new interest regime under the TAA applicable in

respect of tax debts and refunds payable by SARS for which the accrual of

interest is regulated under the other tax Acts, has not yet commenced.5

While the stated objective of the TAA was to consolidate all the similar

administration provisions in the various tax Acts, it is readily apparent that

the TAA goes further than merely consolidating the related administration

1

Director, Business Tax Advisory: Ernst & Young.

2

GG 35491 of 4 July 2011.

3

Proclamation 51 of 2012, GG 35687 of 14 September 2012.

4

According to SARS Interpretation Note 68, the interest provisions of the TAA

relating to underestimate penalties and jeopardy assessments commenced on 1

October 2012 ‘as they are not regulated under any of the other tax Acts’ (para 4.1).

5

Only ss 187(2), (3)(a)–(e) and (4), 188(2) and (3), and 189(2) and (5) of the TAA did

not commence on 1 October 2012.