The tax ombudsman, Judge Bernard Ngoepe, has obtained approval to conduct review a possible systemic flaw in South African Revenue Service delaying payment of refunds but will not be engaging the tax man immediately on the issue.
In what is a first for the country, Ngoepe acknowledged that besides the law, there wasn’t much guidance on how to conduct the investigation.
“From where we are sitting we are breaking totally new ground and if there is some wisdom to learn from other institutions we will do so. But to us it’s a new matter and we will deal with it in accordance with the provisions of the act that governs us.
“We do not look into the matter with undue excitement. We are impartial.”
The approval, which took less than two weeks to get, will result in the ombud investigating the alleged prevalent undue delays by Sars in paying out tax refunds. Ngoepe said his office had postponed engaging with Sars immediately as it was the busiest period of the year and would only engage with them after the March 31 tax returns deadline.
In a media statement on the issue, the office said the review would be on all categories of tax refunds.
Asked if he was concerned about the state of the agency tasked with collecting revenue, Ngoepe was equivocal in his response.
“I am not worried at all with the state of Sars and indeed without being naughty, Sars’ state of Affairs is really none of my concern other than in my capacity as a citizen and taxpayer,” he said, and added that top of his concern was the number of complaints alleging delays in refund payments.
Ngoepe said his office would approach the matter with an open mind, avoid pre-judging and would at all times remain objective.
“We are totally objective,” he said, carefully avoiding being drawn into giving an opinion on the current conflict between the minister, Pravin Gordhan, and Sars commissioner, Tom Moyane.
He clarified that the approval was not for investigating individual complaints but rather the root of the alleged delays in payment of tax refunds.
Ngoepe pointed out that the office had at some point previously received around 500 complaints only to find that almost half were not even valid and Sars was not at fault.
“About half of them were not justified in a sense that people did not comply with the requests made by Sars,” he said.
Sars has recently been accused of delaying refund repayments in order to misrepresent that revenue collected because the delay would result in refunds being rolled over.
Ngoepe said he had seen allegations against Sars in the media but, as the ombud, he couldn’t comment.
“You may find that some of the delays are justified,” he said.
Following the recent amendments to the Tax Administration Act, the office now had the right to approach the minister to investigate.
“Before the amendment I could not even approach the minister for permission to investigate,” said Ngoepe.
He added that the scope of the investigation was limited to delays of refund repayments and that his office had the ability to handle the probe.
“Perhaps I am too optimistic but I think we have the capacity,” he said, pointing out that office had among its staff tax consultants as well as tax law experts.
He emphasised that though people had a right to complain to his office, the avenues within Sars should still be exhausted first.
“It’s important for the public to remember that they must first exhaust the avenues within Sars before they come here,” he said, adding that only exceptional cases would be taken in on such a basis.
Ngoepe said though it was not easy to be accurate how many complaints the office had because the amount constantly changed, he said the number was definitely above 100 at any given time.
“Remember what we are investigating is not the individual complaints,” he said.