Tax Ombud confirms DA’s view that SARS deliberately delays tax refunds
The Tax Ombud report on SARS’ delays in tax refunds confirms the DA’s long-held view that SARS has deliberately delayed tax refunds such as VAT. This investigation by the Tax Ombud flows from and vindicates our request on the 7th of February 2017 to former Finance Minister, Pravin Gordhan, that he call for the Tax Ombud to conduct an investigation into any systemic problems that result in the delayed refunds to taxpayers.
The DA will now propose that the mandate given to SARS is reviewed and where it is required, we shall introduce amendments to relevant legislation that will ensure that refunds are paid out without delay in line with the Tax Ombud’s report.
The report highlights that SARS have abused the system to delay the refunds of taxes and that these delays would unduly increase the reported tax amounts such as the record tax collections of R1.144 trillion “achieved” in the 2016 tax year.
The report states that ‘the residual (non-paid) taxpayers may be of very high value, as indicated in the Report, whose payments, once made, would reduce the amount of tax collected over that particular period. It is therefore imperative that they be paid out timeously.’
This contradicts the assurances given by Tom Moyane, the SARS Commissioner, who has stated there were no undue delays in the payment of refunds. When Tom Moyane, the SARS Commissioner next appears before the Standing Committee on Finance on the 13th of 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 undue emphasis given to SARS rather than taxpayers in the Tax Administration Act No. 28 of 2011 is because SARS employees and not National Treasury officials have previously driven the drafting and adoption of the provisions of and amendments to the act.
The report by the Tax Ombud, Judge Bernard Ngoepe, states that ‘It is clear that the system allows for SARS to unduly delay the payment of verified refunds to taxpayers in certain circumstances. This has become a systemic issue. The system does not sufficiently protect taxpayers. The removal of the obstacles discussed in the Report, as well as any others, would go a long way towards addressing the problem.’
I have written to Yunus Carrim, the Chair of the Standing Committee on Finance, to request that he invite the Tax Ombud to attend the meeting of the Finance committee on the 13th of September 2017 to present his report of the delays in tax refunds.
As the body responsible for collecting money from the public, citizens must be able to trust SARS. Unfortunately, this trust has now been damaged.
Statement issued by Alf Lees MP, DA Shadow Deputy Minister of Finance, 4 September 2017
