Authored by: Jean du Toit, Senior Tax Attorney at Tax Consulting SA 

On 1 February 2020, SARS released an exciting media statement, indicating that the revenue authority has embarked on a journey to reinvent SARS.

With the power of technology and with the right people, SARS hopes to build an organisation that will provide a world-class service to the compliant taxpayer, but one that will be equally tough on transgressors.

This is an encouraging development, surely most South Africans feel we are deserving of a fully functioning revenue authority and it is time for the “tax holiday”, where delinquent taxpayers go about their business unchecked and unchallenged, to draw to a close.

SARS’ strategy
SARS’ vision is quite simple and maybe a bit self-evident.

A more interesting analysis is that of SARS’ strategy to achieve its vision.

SARS intends to embark on a recruitment drive to enlist the services of talented executives in several strategic leadership positions and also to equip SARS officials with the technology and data to perform their functions effectively.

These positions are already advertised on SARS’ careers portal.

Interestingly, none of the advertisements are directed at specialist or forensic auditors or legal counsel, the foundations of the institution.

This is peculiar because there has been a massive brain-drain at SARS, which has left it with a fraction of the experienced staff compliment it had in its heyday.

Reports confirmed that in 2017 alone SARS lost 506 employees. The average service record of those who left in 2017 was almost 15 years.

Should SARS not focus on replenishing its depleted stock of human capital, rather than creating new-fangled units?

It is important to equip your employees with technology and the ability to analyse data properly, but without proficient people on the ground, it is difficult to see how SARS will achieve its objectives. 

Will SARS recruit from abroad?
Perhaps the recruitment process is simply at its inceptive stages and SARS may just cast its net wider with time.
Or maybe SARS will look to lure talent from abroad to fill these positions.

The Commissioner indicated that he wants to take this opportunity “to enrich the current ‘gene pool’ with future oriented skills and some fresh perspective.”

While SARS committed itself to advance employment equity as part of its initiative, it may not be the worst idea to introduce a different breed of auditor at SARS.

After all, there are those who believe that auditors of a certain calibre left SARS’ ranks many years ago.

It could be that the non-existence of any advertised vacancies is because SARS is not looking to recruit from our shores.

Perhaps the Commissioner realises that to give SARS the teeth it needs to once again become a revered (and feared) revenue authority, it may have to pay premium, albeit this may be well worth the investment.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za

ABOUT Tax Consulting SA:
Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance.
​
For more information on Tax Consulting please visit:
Website:  http://www.taxconsulting.co.za/
LinkedIn: Tax Consulting South Africa
Facebook:Tax Consulting South Africa

On 19 December 2019, the FSCA (Financial Sector Conduct Authority and the “Authority”) issued a communication informing the retirement funds industry and stakeholders about its new approach to addressing the inherent conflict of interest relating to principal officers (POs) appointed on boards of retirement funds (funds), while also being employed by service providers to these funds.

Sharna Mittel, independent principal officer, says the Authority should be lauded for clamping down on a long-standing practice that can lead to conflicts of interest and the reduction in the PO’s freedom to act independently, in protecting the interests of funds and their members.

“The Authority recognises that a PO’s ability to comply with his or her duty to report on the activities of the service provider is likely to be impaired if the PO is also employed by the service provider.

The Authority has warned that it will issue Enforceable Undertakings – which are legally binding – to funds and service providers that are in breach of Directive PF No.8, which deals with the prohibition of the acceptance of gratification by fund officers, within the 6 month-time period that the industry has been given to comply,” says Mittel.

How a principal officer’s role can be impaired
Section 8(1) of the Pension Funds Act, 1956 (PFA) requires that every fund appoint a PO. The PO must act as the de facto chief executive officer of the fund, the liaison between the fund and the FSCA and the custodian of the fund’s governance practices.

The PO also has a legal duty to protect the members of the fund by reporting any matter that may prejudice the fund and its members, to the Authority.

Decision-making powers of the board may also be delegated to the PO, subject to a certain thresholds and ratification by the board.

“It has been standard practice for service providers to appoint a staff member internally to act as the fund’s PO, specifically in the retail retirement fund’s space, such as umbrella fund products.

There is an inherent conflict of interest in this situation as a PO that is employed by a service provider cannot perform his or her fiduciary duties independently, by potentially triggering the replacement of the service provider who hired him or her, if such service provider does not perform in keeping with the board’s expectations.

This inherent conflict of interest is contrary to the interests of the fund’s members. The Authority is aware that several funds are in contravention of section 7C(2)(c) of the PFA which requires Boards of funds to avoid conflicts of interest, as well as Directive PF No 8 and they are now addressing the issue in a definitive, on the nose way,” says Mittel.

Six months to bring funds into compliance
Rumours have surfaced that some funds have already been issued Enforceable Undertaking by the FSCA, and the FSCA is said to be fielding calls by service providers who believe the Authority was mistaken when it issued the communication in December.

“The FSCA didn’t exclude retail funds from their communication. Going forward, umbrella funds, preservation funds, retirement annuity funds and all retail funds, may not employ the PO of their funds.

From 12 December 2019, PO’s must be contracted directly by the fund, which will ensure that the PO serves the best interest of the fund and its members, instead of being fettered by service provider’s interests.

The Communication issued by the FSCA will give funds and the relevant parties six months to appoint a new PO that is not employed by the service provider, release their POs from employment to be contracted directly by funds, or face regulatory action,” says Mittel.

She concludes by saying that in her view, the future role of POs will be completely independent, with no employer / employee relationship to fetter their duty to protect members.

“A service provider employing a PO is impermissible and undesirable, and the industry is being compelled to comply. Successful POs of the future will be experienced, knowledgeable and independent of all employment relationships which may interfere with their duty to protect.”

Jerry Botha, Executive Committee Member of the South African Reward Association (SARA) and the Chair of the Employee Benefits and Tax Committee comments: “Rewards professionals within employers can thus act as the PO of a fund, provided the employer is not a ‘service provider’.

We know of many of our members whose functions include serving on the benefit fund, as this is such a critical part of remunerating employees optimally and tax efficiently.

This new regulation also carries a warning for employers and professional members, that the principles of good governance now demand that funds should be held accountable and comply with this new regulation.

Simply put, where an employer participates in an umbrella fund or any retail fund which does not conform with the FSCA regulation, what message does this send to the market and what risks does the employer assume? It will also be interesting to see the urgency with which the FSCA will start enforcement.”

ENDS
 
MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za

For more information on Tax Consulting please visit:
Website:  http://www.taxconsulting.co.za/
LinkedIn: Tax Consulting South Africa
Facebook:Tax Consulting South Africa

Authored by: Tarissa Wareley, Immigration specialist at Xpatweb

The discovery of natural gas along the shores of one of the poorest countries in Africa has paved the way for Mozambique to become the next major supplier of liquified natural gas.

The expected influx of expatriates and investments into the exploration of LNG has forced government departments to implement various measures to monitor as well as facilitate entry into Mozambique.

The Rovuma Basin Decree 2/2014, although approved about six years ago, its various measures and concessions for immigration-related matters were not implemented until recently.

This has been timeous in the booming projects in the oil and gas sector in Pemba, Coral Sul, and others.

From an immigration perspective, this decree relaxes requirements, improves processing times, and removes layered processes. 

Sub-contractors and companies in the Mozambique LNG Project are expected to benefit greatly from its measures.

These companies and their approved sub-contractors, together with a plan of development approved by the Government of Mozambique, will receive access to an online portal for submissions and processing of applications.

The Ministry of Labour introduced this online portal to process applications related to the Rovuma Basin and for adjudication of any expatriate skillset that is required as part of the approved projects for the region.

Overall Improvements to Mozambique’s Visa System
Since access to the online portal is exclusive to companies and sub-contractors related to the approved projects in the Rovuma Basin, all other companies must continue to follow standard processing and requirements.

Quicker processing times were included in the implementation of these measures.

Short-term work permits can be expected to be processed in about 3 – 5 working days as opposed to the standard processing time of 3 - 4 weeks for companies in the non-oil gas sector.

Additionally, companies, as part of their approved plan of development, receive a number of quotas allocated to them facilitating the long-term work permit process.

Long-term work permits applied through available quota positions are also processed through the online portal in shorter timeframes of approximately 5 – 7 working days. Standard processing for such applications has generally been 3 –4 weeks. 

Allowing for online processing of the applications streamlines the application for a long-term work permit avoiding additional bureaucratic tasks as part of the application process. 

Certain requirements such as Certificate of Equivalences issued by the Ministry of Education, similar to the South African SAQA evaluation, have been removed, which usually results in an additional 4 weeks to the end-to-end processing of long-term work permit processes. 

Gateway to Residency in Mozambique
Candidates with approved work permits under the online system may qualify to obtain a residence permit upon arrival instead of previously obtaining a work visa at a Mozambican High Commission abroad and an additional residence permit at the immigration department in the province they are expecting to work.

Although this may be beneficial to all expatriates arriving into Mozambique for the LNG project, it is a process exclusive to companies with an approved plan of development with the Government of Mozambique.

Overall, the changes have been timeous to the upcoming Mozambique LNG projects.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za

ABOUT Xpatweb:
HOLISTIC EXPATRIATE SOLUTIONS
The Xpatweb group has been in existence for over 14 years and includes over 90 professionals, including immigration specialists, mobility practitioners, tax practitioners, attorneys, and chartered accountants. They offer holistic, client-centric, and fully compliant expatriate and work visa solutions. Clients can expect an exceptional end-to-end service that starts with an initial technical meeting to discuss any past challenges, a recommended optimal solution, and the creation of a roadmap and protocol for service delivery. They also offer an on-premises immigration audit service to confirm expatriate employees hold legally obtained, valid visas, and that their duties align with their visa conditions. In addition, their unique online immigration tracking system helps you to easily manage and track expatriate assignees across the globe, is fully customisable and dashboard-driven, and provides a secure repository for storing assignees’ documents.

For more information on Xpatweb please visit:
Website:  http://www.xpatweb.com/
LinkedIn: https://www.linkedin.com/company/work-permit-south-africa/
Facebook:https://www.facebook.com/xpatweb/

South African legislation governing expatriate tax exemption is set to change dramatically from 1st March 2020, affecting South Africans worldwide. This includes anyone who has permanently settled in another country.
 
Those who do not comply with the new requirements face stiff penalties and risk up to two years in prison.
 
To help expatriates understand their obligations, local tax firm, Tax Consulting South Africa, held special workshops on the topic in the UAE and Qatar.
 
“The outstanding attendance at these presentations demonstrates that expatriates are desperate to avoid falling foul of the new law,” says Claudia Aires Apicella, Head of Financial Emigration at the firm.
 
The general consensus after the events was, there are still many expatriates out there with their head in the sand regarding the change in legislation and therefore, failing to make proper arrangements to ensure that they are compliant and following proper procedure.
 
What’s changed?
The current Income Tax Act provides that if a South African in employed by either a local or foreign employer and renders services to them outside South African for longer than 183 days in any 12 month period, being continuously abroad for 60 of those days, their remuneration earned during that time shall be exempt from taxation by the South African Revenue Service (SARS).
 
From 1st March 2020, the conditions for exemption remain the same. However, only the first R1 million in remuneration will be exempt, with earnings above that threshold being subject tax at a rate of up to 45%, payable to SARS.
 
Now what?
It is imperative that South African expatriates get themselves acquainted with the law and how it will affect them and avoid being fish bait to the many dodgy investment and aggressive tax schemes being punted at them.
 
The lack of knowledge has also led to a number of expatriates being misinformed by SARS agents and inexperienced tax practitioners that, should they wish to return to South Africa upon retirement, they are required to reintegrate to the country, while remaining compliant. This is, however, untrue and misleading.
 
There are a number of options available that could assist in alleviating the tax burden of expatriates whilst ensuring that they remain compliant. These include Financial Emigration and Double Tax Agreements (“DTA”) signed between two countries. These are safe and compliant planning options that help expats lessen their tax burden.
 
Financial Emigration has been recognized and confirmed by SARS as a process in which one can cease their tax residency in South Africa, should one have a permanent or long-term intention to remain outside of South Africa on a permanent basis. On the other hand, the DTA is used in the instances where individuals who have the intention to return to South Africa or who are simply uncertain about their intention to return.
 
It is important to note, however, that these options are specific and need to be applied on a case by case basis.
 
The trip revealed and confirmed just how diverse the circumstances of South African expatriates living abroad are and are yet in the same boat when it comes to their tax affairs. Nevertheless, there is no one-size-fits-all solution to the amendment of the legislation.
 
All in all there are a handful of South Africans becoming more informed but there are many out there who are still looking for guidance in these uncertain times, which the workshops aim to provide. The firm intends to travel to other MENA countries to hold more workshops on the new expatriate tax law change.
 
ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za
 
ABOUT Tax Consulting SA:
Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance.
 
For more information on Tax Consulting please visit:
Website:  http://www.taxconsulting.co.za/
LinkedIn: Tax Consulting South Africa
Facebook: Tax Consulting South Africa

The Angolan government has been introducing several initiatives to encourage investment and business opportunities in the oil rich country since former president José Eduardo dos Santos stepped down.

The first new president in 38 years, João Lourenço, took over at the end of 2017. One of his first initiatives was to relax the visa requirements for countries like Botswana, Mauritius, the Seychelles, Zimbabwe and notably Singapore.

Citizens from Namibia, South Africa, Mozambique, the Cape Verde, Rwanda and Zambia can enter Angola without having to apply for a business or tourist visa.

​“It is clearly an effort by the Angolan government to encourage business and investments into the country, and to alleviate the unavailability of foreign currency in the country and the challenges behind that,” says Tarissa Wareley, immigration specialist at Xpatweb.

She says another innovative decision is to allow people to conduct business under a tourist visa. This is a concession to investors from countries who are still required to enter the country with a visa. “A tourist visa will now suffice, even though visitors will be doing business or negotiating investments.”

Wareley says the government has also extended the validity of the tourist visa from 90 days to 120 days.The introduction of e-visa applications has streamlined the process to allow for easy access into the country. The e-visa will be issued within 24 hours.

The normal processing times for visas range anything between two to three weeks. If there is an urgent need for a business or investors to enter Angola it will no longer be subjected to this delay. “It allows business people and potential investors the opportunity to be first in the market if there are new opportunities,” says Wareley.

The government is also allowing foreign nationals to partner with an Angolan national to set up a business, without having to invest at least $500,000.

​According to the World Bank the oil sector accounts for one-third of Angola’s GDP and more than 90% of exports. Given the importance of the sector the government has adopted a more lenient approach towards short-term visas.

The validity of these “emergency visas” has been extended from seven days with an additional seven days to a total of 20 days (initial 10 days with an additional 10 days).

Companies generally apply for a short-term visa when they have, for example, urgent maintenance requirements on an offshore oil or gas rig which requires the attention of a specialist technician.

Companies, who pay a corporate income tax rate of 30%, have been subjected to harsh penalties because they exceeded the number of days allowed under the emergency visa.

“The additional days would reduce the possibility of receiving penalties and can lead to major cost savings for companies.”

These changes to the visa requirement regime in Angola are important for any investor or company wishing to set up operations in Angola, wanting to invest in the country or increase their business operations in the country.

“We hope that streamlining the work permit process will be the next priority to allow for quicker processes times to obtain a work visa,” says Wareley.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za

ABOUT Xpatweb:

HOLISTIC EXPATRIATE SOLUTIONS
The Xpatweb group has been in existence for over 14 years and includes over 90 professionals, including immigration specialists, mobility practitioners, tax practitioners, attorneys, and chartered accountants. They offer holistic, client-centric, and fully compliant expatriate and work visa solutions. Clients can expect an exceptional end-to-end service that starts with an initial technical meeting to discuss any past challenges, a recommended optimal solution, and the creation of a roadmap and protocol for service delivery. They also offer an on-premises immigration audit service to confirm expatriate employees hold legally obtained, valid visas, and that their duties align with their visa conditions. In addition, their unique online immigration tracking system helps you to easily manage and track expatriate assignees across the globe, is fully customisable and dashboard-driven, and provides a secure repository for storing assignees’ documents.

For more information on Xpatweb please visit:
Website:  http://www.xpatweb.com/
LinkedIn: https://www.linkedin.com/company/work-permit-south-africa/
Facebook:https://www.facebook.com/xpatweb/

Authored by: Thomas Lobban, Jean Du Toit & Jonty Leon from Tax Consulting SA
 
This week, on 26 November 2019, the National Assembly passed the latest tax bills, which is set to be promulgated by the President after it has been passed by the National Council of Provinces.
 
On the face of it, some concessions have been made for individual taxpayers, but these offer cold comfort in the bigger scheme.
 
Proposed Amendments
Before we get to the truly profound implications, it is important to note the following amendments:

• The tax exemption of excess contribution amounts paid by taxpayers in respect of retirement annuities received by them will now extend to annuities received from provident funds and provident preservation funds as well, from 1 March 2020;
• The ordinary rebates available to taxpayers who receive a pension in respect of a deceased spouse will no longer be taken into account when tax is withheld on these amounts, from 1 March 2021;
• Previously, the transfer of one’s retirement interest from a pension fund to provident fund or provident preservation fund was non-taxable from 1 March 2019, but will now be retrospectively treated as a taxable event, potentially placing these taxpayers in a non-compliant position; and
• Section 12J of the Income Tax Act provides a tax deduction to taxpayers, in proportion to their investment in qualifying venture capital companies, which is intended to promote economic growth. However, this will now be subject to a maximum allowable investment of R2,5 million for individuals, which means more cash-in-hand for government.
  
  

Tax Man Always Searching for His Pound of Flesh
At first glance, it appears that there are no profound amendments to the Income Tax Act or the Tax Administration Act that would raid the pockets of taxpayers, to generate additional revenue.
 
This is peculiar, since the prevailing budget deficit is a massive elephant in a room with grim economic prospects and a junk credit rating.
 
However, taxpayers must not be fooled. In the current economic climate and with SARS so far behind on collection, it is unlikely that the 2019 legislative cycle would not have been put to good use the drum up some more money.
 
Government is smart enough to understand that big changes cause controversy, as we have seen with the VAT rate increase or the amendment to the exemption on foreign employment income.
 
With no such amendments, were taxpayers truly given a tax break in light of the current economic landscape?
 
No Change Means More Revenue
In truth, the biggest change by far is not a change at all, nor is it actually found in the Income Tax Act or Tax Administration Act.
 
The Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2019 proposes no amendment to the tax brackets which prescribe the rates of tax applicable to individual taxpayers.
 
In a country with a relatively high inflation rate, this is a problem, since the salaries of employees generally increase in line with inflation. Where the tax brackets do not increase correspondingly, this results in so-called “bracket creep”.
 
In real terms, while this means that individuals are technically earning more, they are actually taking home less pay each month as compared to the previous year. In fact, in many cases taxpayers may be pushed into a higher tax bracket. The upshot is the taxpayer’s pay increase is wiped out by additional taxes.
 
It should also be mentioned that this is the second year in a row that the tax brackets have not been increased, which means that taxpayers will need to further reduce their cost of living for another year, in order to make ends meet.
 
While this will not necessarily affect lower income earners, it will certainly have a significant impact on the already overburdened taxpayers in the middle- and higher-income brackets.
 
This also affects those who will be withdrawing lump sum benefits from their pension interest. In this case, the special tax rates applicable to these amounts also remain unchanged.
 
This means that these persons will be forced to enter into retirement with less cash available to defray their cost of living – an unfortunate consequence of bracket creep.
 
Say Good-Bye to South Africa’s High Earners
The long-term effect of these changes (or lack thereof) can only realistically be determined over time.
 
This is an effective measure to generate revenue over the short term, but the question must be asked; how much financial constraint taxpayers are willing take before it becomes unsustainable and individuals simply decide to leave South Africa?
 
We have already seen a massive jump in South Africans deciding to leave the tax net by formally noting their non-resident status by financially emigrating from South Africa.
 
As it stands, National Treasury is already relying heavily on the higher earning segment of the individual tax base and measures like these forces the hand of taxpayers who are already contemplating their departure.
 
Ultimately, we lose important taxpayers and their descendants to the tax base permanently, which leads to less revenue for government.
 
Cunning as it may be, it would seem that government’s band aid is a temporary fix that will exacerbate a far larger problem. 

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za
 
ABOUT Tax Consulting SA:
Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance.
 
For more information on Tax Consulting please visit:
Website:  http://www.taxconsulting.co.za/
LinkedIn: Tax Consulting South Africa
Facebook: Tax Consulting South Africa

Written by: Jonty Leon, Financial Emigration Legal Manager
 
SARS Views – Not a Law Unto Itself
It is an unfortunate sight when tax advisors from varied backgrounds, but more so those who do not have a legal background, turn a blind eye to South African tax legislation and rather submit to the ever-dominating “views” of SARS. 
 
Arguing with such an advisor who uses “SARS said…” or “SARS’ interpretation note…” is like screaming into a black hole. Unlike for practicing attorneys, who are officers of the Court and must serve the Court to come to the correct decision; the tax practitioner plays a different role.
 
SARS’ views are unavoidably one-sided, and the ethically correct space for a tax practitioner to operate is to provide balance to the equation, whilst always ensuring full compliance.
 
Legally Blind Tax Advisors
When a tax advisor only makes use of the views, or releases of SARS to determine what is best in one’s situation, which occurs more often than we like to believe; it generally ends with the taxpayer inadvertently and unnecessarily compromising their position, in favour of SARS.
 
A true tax advisor must read the law. If this is not the starting point of their advice, there is already a problem and the advisor sets the client on a trajectory of paying too much tax or selling a tax service which is not really needed.
 
With the correct interpretation of the law, the tax advisor has a chance. Without it, SARS reigns supreme, swinging its sceptre in favour of its own agenda.
 
The issue with a tax advisor taking the words of SARS as gospel, is that SARS is a litigating party to any dispute with a taxpayer. It is therefore inconceivable that SARS’ views on legislation, “must be correct”.
 
SARS has one job, to collect as much revenue from the taxpayer as possible, and not to provide ways for the taxpayer to reduce their liability. For some reason, tax advisors seem to forget this and play straight into the field of SARS’ collection priorities.
 
The Full Might of the Letter of the Law
Our Constitutional Court has clearly stated that SARS’ view cannot be relied upon, and specifically refers to SARS’ Interpretation Notes. In the ConCourt case Marshall and Others v Commission for the South Africa Revenue Service, the Court stated:
 
“Why should a unilateral practice of one part of the executive arm of government play a role in the determination of the reasonable meaning to be given to a statutory provision?...In those circumstances it is difficult to see what advantage evidence of the unilateral practice will have for the objective and independent interpretation by the courts of the meaning of legislation, in accordance with constitutionally compliant precepts. It is best avoided.’ (Emphasis added)
 
This Judgment is damning against SARS, and goes on to state, “Deference to an administrative body’s own interpretation of the meaning of a statute which it is responsible for implementing should be avoided, particularly when the administrative body is party to the litigation.”
 
The Legally Literate Tax Advisor
With the law in hand, a tax advisor that has been to Tax Court is an invaluable weapon. Having stood toe-to-toe with SARS on many occasions, and having insight into their strengths and weaknesses but more importantly understanding the legal obligations to win a case, becomes the only reliable stronghold to a daunting fight against the great collector, SARS.
 
In terms of section 102 of the Tax Administration Act No. 28 of 2011, the onus of proving, “that an amount, transaction, event or item is exempt or otherwise not taxable”, falls on the taxpayer.
 
Thus, the taxpayer bears the onus of proving that they are “innocent” on a balance of probabilities. Our Court’s in a decision by the Special Court in ITC 43, held that, “in the case of all things being equal we are bound to decide in favour of the Commissioner.”
 
This means that the starting point for any tax planning or compliance advice, including SARS disputes, should be whether the taxpayer has passed the burden of evidential proof.
 
The Law will Seal the Deal
It is so important to have a legally literate tax advisor with tax court experience, who is capable and willing to use all available legal weaponry in their arsenal to advance your case.
 
More importantly to ensure that the advice given to you prior to you even needing to step foot in a Court, is holistic and grounded in law, not on SARS’ opportunistic interpretation of the law.
 
The next time you get an audit finding or your tax advisor hammers on “SARS will say this” and “SARS will say that”, be mindful of what the Constitutional Court has said about the views of SARS, that they ‘best be avoided’. A Tax Advisor is there to serve the taxpayer’s interests, not the interests of SARS.

ENDS

MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za
 
ABOUT Tax Consulting SA:
Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance.
 
For more information on Tax Consulting please visit:
Website:  http://www.taxconsulting.co.za/
LinkedIn: Tax Consulting South Africa
Facebook: Tax Consulting South Africa