The government has extended the time period to file a Notice of Objection from 30 to 80 days, says Jashwin Baijoo, the head of strategic engagement and compliance at Tax Consulting SA.
This spells good news for taxpayers in South Africa as it makes voluntary compliance easier and gives the South African Revenue Service (SARS) breathing room to clear existing backlogs – especially for disputes surrounding amounts of less than R1 million.
“It must, however, be noted that this ‘extension’ is not an open invite for taxpayers to not be pro-active in regularising or rectifying their tax affairs.
“The pragmatic taxpayer will be rewarded for immediately seeking assistance from astute tax specialists where they do not agree with an assessment, seeking guidance in lodging a dispute against SARS’ decision,” said Baijoo.
According to Tax Consulting SA, the timeframes regarding objection and post-objection remain as follows:
- A Request for Reasons must be submitted within 30 days from the date of assessment
- The period of extension for filing a Request for Reasons, per SARS’ discretion, remains 45 days
- Any Appeal to either the tax court or tax board must be delivered within 30 days from delivery of the Notice of Disallowance on the Objection.
- It remains possible to request extensions of the above-prescribed timeframes. However, this is entirely at the discretion of a senior SARS official and only in very limited circumstances.
Baijoo noted that the risk of a request for an extension being denied is not worth taxpayers being lethargic in approaching the revenue authority to rectify what may very well just be an error in judgement on the part of SARS.
Regarding tax debt relief, in instances where a taxpayer, under the Tax Administration Act, does not have legal merits to pursue an objection, a Compromise of Tax Debt application is available to the taxpayer.
“The compromise is aimed at aiding taxpayers to reduce their tax liability by means of a Compromise Agreement, which is entered into with SARS.
“Where SARS is approached correctly, and the taxpayer’s financial circumstances warrant it, a tax debt can be reduced, and the balance paid off in terms of the compromise,” Baijoo said.
The tax expert said that there is an advantage to being the ‘first-mover’ and seeking an appropriate advisor for anyone on the wrong side of the taxman. If things do go south, the revenue service must be engaged legally.
To best protect oneself from the tax authority, Tax Consulting SA said that ensuring compliance first and foremost is the best strategy.