06/12/2017 07:14 GMT | Updated 06/12/2017 07:14 GMT

Davis Committee Calls For Taxpayers Bill Of Rights

The Davis committee has again recommended a bill of rights to protect taxpayers.

Mike Hutchings / Reuters
The Cape Town headquarters of the South African Revenue Service (SARS).

The need for a taxpayer bill of rights has once again been highlighted by the David Tax committee and the office of the tax ombudsman, Business Day reported on Wednesday.

This was outlined in the David committee's final report which states that a bill of rights and a service charter would guarantee the rights of taxpayers.

It states that this was essential and be enforceable with legal effect.

The tax ombud should be given the powers to enforce the bill of rights, and the ombud's powers and functions should be extended to allow it to mediate in a tax alternative dispute-resolution, the report recommended.

The bill or rights should encompass, amongst others, the right to finality; the right to privacy and confidentiality; to quality of service, according to Business Day.

CEO of the office of the tax ombud, Eric Mkhawane, told Business Day that the office had voiced its disappointment at the lack of a bill of rights and a service charter.

"We have provided SARS with a draft document setting out the rights and obligations of taxpayers, which is not that much different from the Davis committee's recommendations a long time ago," he said.

Tax ombud Bernard Ngoepe told Business Day that Sars had ignored calls to finalise the charter and bill of rights. This was despite an undertaking by Sars commissioner Tom Moyane in September 2016 that the charter would be implemented by the end of March 2017, Ngoepe reportedly said.

This is not the first time that the call has been made by the committee. Business Day reported in November that the committee called for the bill of rights to regulate the relationship between Sars and taxpayers.

One of the issues that concerned the committee was that Sars "savagely" applies the "pay now, argue later" principle which could be unconstitutional.

"The 'pay now, argue later' rule is, however, an infringement to the right to property as enshrined in the Constitution. The main reason for the rule is to ensure that SARS is not out of pocket (put differently, that SARS is in the money) during the process of appeal or review. This rule also has the effect of discouraging taxpayers from engaging in appeal or review processes against SARS as, psychologically, the taxpayer would have 'lost' the money already.

"This rule creates a huge bias in favour of SARS. The argument that taxpayers often raise frivolous objections serves to ignore various other available measures of determining the validity of objections," the committee reportedly said.

At the time, Fin24 reported that the committee recommended a separate inquiry into all relevant legislation surrounding the running of Sars.

The committee also raised concerns about the unfettered power given to the President to appoint the Sars commissioner, minimising the role of the finance minister in the process, and said there was no reason why the commissioner could not be appointed in the same way as the public protector.