For many South Africans, dealing with the South African Revenue Service (SARS) can be a daunting experience, especially when disputes arise over tax matters. While SARS is mandated to collect revenue efficiently and fairly, there are times when taxpayers feel aggrieved by administrative delays, poor service, or procedural errors.

In such cases, the Office of the Tax Ombud (OTO) stands as a beacon of fairness and justice, offering an independent avenue for resolving certain disputes with SARS.

The Origins and Mandate of the Office of the Tax Ombud

The OTO was established in October 2013, following international best practice and inspired by similar institutions in countries like Canada, the United States, and the United Kingdom. Before its creation, South African taxpayers who had exhausted SARS’s internal complaints mechanisms had no independent redress channel.

The OTO’s mandate is set out in the Tax Administration Act, 2011. Its primary role is to review and address complaints by taxpayers regarding service matters or procedural or administrative issues arising from the application of tax laws by SARS. Importantly, the OTO is not a court and does not deal with disputes about the amount of tax owed or the interpretation of tax law—those matters must follow the formal objection and appeal process within SARS.

The Process: SARS First, Then the OTO

Before you can approach the OTO, you must first try to resolve your issue directly with SARS. This is a crucial step, as the OTO is designed to be a last resort for taxpayers who have not found relief through SARS’s internal mechanisms.

Direct Engagement with SARS:

If you have a complaint - such as a delayed refund, poor service, or a procedural error - you should first contact SARS directly. SARS will provide you with a case or reference number, which is important for tracking your complaint.

Escalation to SARS Complaints Management Office (CMO):

If your issue is not resolved at the first level, you can escalate it to the SARS Complaints Management Office. This can be done by calling the CMO or lodging a complaint via eFiling.

Exhausting SARS’s Internal Remedies:

Only after you have exhausted these internal remedies - and if your complaint remains unresolved - can you approach the OTO. The OTO requires evidence that you have followed the SARS complaints process, including reference numbers and correspondence.

Exceptions:

There are exceptions where the OTO may accept a complaint without exhausting SARS’s processes. These include cases where following SARS’s process would cause undue hardship, where systemic issues are involved, or where unreasonable delays make the process ineffective.

When and How to Approach the OTO

• You have a service, procedural, or administrative complaint against SARS (not a dispute about the amount of tax owed).
• You have tried to resolve the issue with SARS and the CMO, but have not received a satisfactory response.
• There are compelling circumstances, such as undue hardship or systemic issues, that justify bypassing SARS’s internal process.

Assessment and Investigation:

The OTO will review your complaint to ensure it falls within their mandate. If accepted, they may request further information, forward the complaint to SARS for a response, or conduct their own investigation. The OTO aims to resolve complaints through informal, fair, and cost-effective procedures, often using mediation or conciliation.

Outcome:

While the OTO’s recommendations are not legally binding, SARS implements the vast majority of them, reflecting the OTO’s effectiveness in promoting fairness and accountability.

Conclusion

The Office of the Tax Ombud is a crucial institution for ensuring fairness in South Africa’s tax administration. By providing an independent, accessible, and effective channel for resolving service, procedural, and administrative complaints against SARS, the OTO helps maintain the balance between SARS’s powers and taxpayers’ rights. If you ever find yourself at an impasse with SARS, remember that the OTO is there to help - just make sure you’ve followed the right steps first and it is recommended that you approach your professional accountants and tax advisors to assist in this regard.

Please note that the above is for information purposes only and does not constitute tax/financial advice. As everyone’s personal circumstances vary, we recommend they seek advice on the matter. While every effort is made to ensure accuracy, Nexia SAB&T does not accept responsibility for any inaccuracies or errors contained herein.

 

Article prepared by: Stefan Diederiks CA(SA)

Registered Tax Practitioner

 

For any queries or further information, please contact:

•         Mansoor Salee - Director

M: (+27) 82 454 4786| E: mansoor@nexia-sabt.co.za

•         Yousuf Hassen - Director

M: (+27) 82 333 3376 | E: yhassen@nexia-sabt.co.za