A taxpayer has 30 days to object to a SARS ruling; this can be extended by another 30 if written reasons for the ruling are requested. However, the playing field is far from level, as the taxpayer found out in ABC (Pty) Ltd v CSARS (0038/2015), heard before the Tax Court of South Gauteng, Johannesburg. The dispute involved about two million rand.
The taxpayer’s objection was late by 65 days and the court held that no “exceptional circumstances” had been proved in order to justify the tardy response. Thus the objection was not heard and the assessment was confirmed.
Difficult for lawyers
The bench suggested that the taxpayer should have engaged a firm of specialist tax attorneys. Good advice, on the face of it, but from personal experience I wonder if the taxpayer’s legal team was really to blame here.
If a lawyer gets involved in a tax objection (and the earlier they do so, the better), that lawyer has to be authorised to make such an objection. It sounds simple, but it’s not. SARS has a ‘policy’ that objections can only be made online. Those who have gone to the trouble of getting themselves approved as tax practitioners can make an appointment to see SARS, but there is likely to be a waiting period of two weeks or so, which bites into those 60 days.
Neither is submitting the objection via e-filing as easy as advertised. After some days have past, the lawyer will be issued with a code to override the code of whoever handles the e-filing on behalf of the taxpayer. The new code is valid for only a short while. The lawyer might be involved in a trial. On his or her return, the codes will be invalid, and the lawyer is back to square one.
This is why, in my view, a delay of 65 days is not a long time. To put it bluntly, SARS has made it almost impossible for a lawyer to get involved in dealing with an objection. I know from personal experience that it’s far easier for a lawyer to put a case before a judge (less red tape, fewer obstacles) than to lodge an objection with SARS.
What makes it all worse is that the same time constraints do not apply to SARS. If SARS takes more than the requisite amount of time to respond or does not even respond at all, the assessment remains valid.
So we are dealing with a one-sided set of rules. It’s a pity that the situation on the ground was not put to the learned judge in the above case, as this might have made a difference to the outcome.