Tax Ombud confirms DA's view that SARS deliberately delays tax refunds
The Tax Ombud report on SARS's delay in tax refunds confirms the DA's long-standing view that SARS deliberately delayed tax refunds such as VAT. This investigation by the Tax Ombud vindicates our request to the former Finance Minister, Pravin Gordhan, on 7 February 2017, in which he asked the Tax Ombud to investigate any systemic problems that result in delayed refunds to taxpayers.
The DA will now propose that the order given to SARS be reviewed and, where necessary, we will introduce amendments to the relevant legislation which will ensure that refunds are paid without delay in line with the Tax Ombud's report.
The report highlights that SARS has abused the system to delay refunds of taxes and that these delays will unnecessarily increase reported tax amounts such that record tax collections of R1.144 trillion were “achieved” in the 2016 tax year.
The report said 'The value of residual (unpaid) taxpayers could be very high, the report said, whose payments, once made, would reduce the amount of tax collected in that particular period. Therefore, it is important that they are paid on time.
This contradicts assurances given by SARS Commissioner Tom Moyane, who said there have been no undue delays in the payment of refunds. When Tom Moyane, SARS Commissioner next appears before the Standing Committee on Finance on 13 September 2017, the DA will ask Tom Moyane to explain why the Tax Ombud has now contradicted his statements that there were no delays in refunds.
The Tax Administration Act No. 28 of 2011 places undue emphasis on SARS rather than taxpayers because SARS staff and National Treasury officials first drove the drafting and adoption of the provisions and amendments to the Act.
The report by the tax ombudsman, Judge Bernard Ngoepe, says 'It is clear that the system allows SARS to unnecessarily delay the payment of verified refunds to taxpayers in certain circumstances. This has become a systemic issue. This system does not adequately protect taxpayers. Addressing the barriers discussed in the report, as well as others, will go a long way in solving the problem.
I have written to Chairman of the Standing Committee on Finance Yunus Carim requesting him to invite the Tax Ombud to attend the Finance Committee meeting on 13 September 2017 to present his report on delays in tax refunds.
As the body responsible for collecting money from the public, citizens should be able to trust SARS. Unfortunately, this trust has now been damaged.
Statement issued by Alf Lees MP, DA Shadow Deputy Finance Minister, 4 September 2017