On 1 August 2023, representatives from Recognised Controlling Bodies (RCBs) of SARS met the newly appointed Tax Ombud Ms Yanga Mputa for the first time after she joined the Office of the Tax Ombud (OTO) as South Africa’s first female Tax Ombud on 1 July 2023. She is also an Admitted Attorney of the High Court of South Africa. Prior to taking up the position of Tax Ombud, she spent 9 years working in National Treasury as Chief Director: Legal Tax Design. Prior to this, she was a Tax Specialist at the South African Revenue Service (SARS) from 2009.
The RCB Forum represents all controlling bodies of tax practitioners. The Forum is in the position to understand the problems experienced by members on the ground and can play a key role in educating members on the functions and processes of the OTO.
Ms Mputa was warmly welcomed in her new role by the RCB Forum. The purpose of this first meeting was to find ways that the RCBs can work with the OTO to assist in making the systems and processes of paying taxes more efficient. An important part of this is to channel information in a meaningful manner to the OTO, to identify focus areas recommended for improvement to SARS.
Information was shared during the meeting including various matters, highlighted below.
Functional, structural, and operational independence of the OTO
The Tax Ombud is appointed and reports directly to the Minister of Finance and may only be removed by the Minister. Functional independence from the government allows the OTO to make decisions relating to the work it undertakes and publish reports.
Structural and operational independence, however, is not yet fully achieved due to various constraining factors. As a result, the OTO’s budget – even though it is ring-fenced – is received through SARS.
The OTO applies the same policy as SARS when employing personnel and making use of shared IT services. Looking at it from the bright side these alignments ensure that the OTO can employ qualified staff with knowledge and experience on par with SARS employees. In addition, obtaining information from SARS can become more problematic for entities with high levels of independence.
Complaints received by the OTO
Most of the complaints received in the first quarter of the year by the OTO came directly from taxpayers, not from tax practitioners. Less than half of the complaints were accepted by the OTO for further investigation. Most of the rejections were because taxpayers prematurely approach the Tax Ombud, without exhausting available SARS processes.
Tax practitioners should keep in mind that when an assessment is final because timelines were missed the OTO will not be able to take the matter further.
The top categories of complaints remained on refunds and verifications. There was a significant improvement in response time from SARS on resolving the matters. Cases resolved by SARS within 30 days have increased from 24% to 50%.
SARS processes and how this impacts the cases taken on by the OTO
The RCB Forum noted that one of the reasons leading to taxpayers approaching the OTO prematurely is the fact that the complaints processes of SARS are onerous and do not always work. Response times are too long, often months to get answers to a query which is exhausting for tax practitioners. It also seems that the role-players often choose to engage in legal processes against SARS via courts rather than using OTO processes.
The problems with the SARS Call Centre are well known. A taxpayer or tax practitioner, however, cannot approach the OTO unless these processes are finalised. The RCB requested the OTO to consider the look at these processes and identify Call Centre issues, i.e., calls dropped, the high waiting times, and the ability of call center employees to answer queries under ‘systemic issues’.
In the meantime the OTO recommends to taxpayers make an appointment with SARS to call them as this will provide evidence.
The next steps
The RCB Forum was requested to provide inputs to the OTO regarding:
- Understanding the possible scope of the OTO to promote more efficient processes within SARS considering issues of budgetary constraints and the level of independence.
- Relationship in public transparency – regular meetings need to be scheduled with key stakeholders. The RCB Forum to advise on the frequency of such meetings.
