Tax Ombudsman case 22: Delays in Payment of Refunds

February 2023

The Office of the Tax Ombud (OTO) continues to receive many complaints about nonpayment of refunds and delays in finalising disputes lodged. Not all complaints received within these categories are due to the South African Revenue Service (SARS) not adhering to timeframes but rather to a lack of taxpayer awareness of applicable turnaround times. Another complicating factor is that these complaints do not fall within the ambit of an identified systemic issue, which means the OTO cannot accept them.

In case 22, after objecting to the assessment issued by SARS and providing further evidence, SARS partially allowed the objection on 26 April 2022, which would result in a refund due to the taxpayer. However, after waiting for a reduced assessment until 11 May 2022, the taxpayer lodged a complaint with the SARS Complaints Management Office (CMO arguing that the delays in finalising the case were causing the taxpayer undue hardship. The CMO invalidated the complaint indicating that the objection was already finalised. The taxpayer then lodged a complaint with the Office of the Tax Ombud.

However, the Ombud found that the taxpayer should have waited for the normal turnaround times to be exhausted before lodging a complaint.

According to Rule 9(1) of the Dispute Resolution Rules, the applicable turnaround time for finalizing an objection is 60 days. When the taxpayer is required to submit additional information SARS has an additional 45 days to finalise the objection after receiving the information.

The taxpayer lodged the complaint with the OTO on 17 May 2022 when SARS was still within the 45-day turnaround time for issuing the reduced assessment. The complaint did not relate to an identified systemic issue, so the OTO could not accept it. Taxpayers should always be mindful of the SARS turnaround times that apply before lodging complaints.

You can read the full article on Case 22 here.