Tax ombud – recourse for aggrieved taxpayers

The Tax Administration Act that came into effect on 1 October 2012 is a valiant attempt to balance the rights of the tax man with those of the taxpayer. One of the ways of bolstering the taxpayer’s position on this not very level playing field is the creation of the office of the ombudsman or tax ombud. Exactly one year after the inception of the Act, Gauteng Judge President Ngoepe was appointed as the first encumbent of this office.

What is the role of the ombud?

The mandate of the ombud is set out in section 16(1) of the Act:

…to review and address any complaint by a taxpayer regarding a service matter or a procedural or administrative matter arising from the application of a tax Act.

The aim is to provide taxpayers with a low-cost mechanism to address administrative difficulties that cannot be resolved by SARS. However, the ombud’s powers are limited. They may not review legislation or policy unless it relates to a service, procedural or administrative matter. Although the Act is not clear on the issue, the decision as to whether a matter falls within the scope of his mandate probably lies with the ombud themselves.

If you have a complaint

A complainant is required to first exhaust the available complaints resolution mechanisms within SARS before approaching the office of the ombud, unless there are compelling circumstances for not doing so. This will for instance be the case where exhausting internal mechanisms will cause undue hardship to the taxpayer, or is not likely to produce a result within a reasonable period of time.

Complaints are to be made in writing on the prescribed form to the office of the ombud. A copy of the complaint form can be requested from the tax ombud’s office by telephone, fax or e-mail. The form must be completed and signed by the taxpayer. If a tax practitioner or other person completes and signs the form on behalf of the taxpayer it is advisable for the client to complete a power of attorney specifically for this purpose. All supporting documents must be attached to the form. A request for review of the complaint should include any correspondence received or sent relating to the complaint, call reference numbers, and the relevant contact details of the SARS officials with whom the taxpayer dealt. It is recommended that the complainant specifically indicates which internal actions were pursued and what SARS’ response was.

If a taxpayer is unsure as to whether or not his complaint falls within the ombud’s mandate, or if a taxpayer is unable to write his/her complaint, they may call the ombud’s office where trained professional staff will attend to the call and advise what should be done.

What can the ombud do?

The ombud may review and address a complaint in a number of ways, including by way of mediation or conciliation. He/she may also facilitate a taxpayer’s access to complaint resolution mechanisms within SARS. Ultimately they must follow informal, fair and cost-effective procedures in resolving a complaint. The ombud’s recommendations regarding the resolution of a matter are not binding on SARS. In the interests of legitimacy and transparency it is however likely that SARS will follow the recommendations.

Reports by the ombud to the Minister of Finance must be submitted on an annual basis. In addition, they must also report to the Commissioner of SARS at quarterly intervals. This report must contain recommendations for any administrative action that may be appropriate to resolve the problems encountered by taxpayers.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).