Speech By The Minister Of Finance, Hon Pravin Gordham, On Tax Administration Bill
24 November 2011
The 2008 financial crisis and the current economic stresses in Europe,
in particular, once again underline the crucial importance of sound tax
policy, an effective tax administration, and a deeply entrenched
compliance culture in society. We are privileged to have all three in
South Africa. This Bill reflects our constant endeavour to simplify law,
reduce red tape, and streamline administration to provide a better
service to taxpayers whilst strengthening enforcement and compliance.
Our tax administration law is currently duplicated in several different
tax Acts, ranging in age from 3 to 62 years old. The time has come to
streamline and bring the law up to date! The Tax Administration Bill
creates a single, modern framework for the common administrative
provisions of the tax Acts.
2. Key features of the Bill
Some key features of the Bill are:
1. A phased move to:
- a single registration process and number across taxes to reduce red tape and streamline the system,
- a single account for taxes and simplified allocation rules, for the same reason, and
- self-assessment of taxes, so taxpayers need not wait for a SARS assessment.
2. Greater access to third party data to underpin SARS initiatives such as the pre-population of individual tax returns.
3. Clearer rules on SARS access to information so tax liabilities can be determined more quickly and accurately.
4. The ability to search business premises without a warrant in narrow cases and issue so-called jeopardy assessments, so SARS can act when tax is at risk and time is of the essence.
5. Clear requirements and timelines for the issue of tax clearance certificates, to provide greater certainty.
6. Feedback on audit progress and findings, to engage more fully
7. Specific timeframes for decisions of the Tax Board (a small claims court for tax) and wider reporting of Tax Court decisions, to improve access to justice.
8. The introduction of a Tax Ombud, informed by international experience, will provide taxpayers with a low cost mechanism to address administrative issues.
In conclusion, one thing that the Bill before us today does not address is the transformation of the advisor community. The aggressive undermining of the fiscus that some pursue, even at a time of extreme fiscal stress, is dangerous. They and their clients must pause for reflection, as we must, on the damage they can do to the tax system and South Africa more broadly.
That said, I would like to thank the broad range of stakeholders who have been involved in the development of the Bill over the last two-and-a-half years. More specifically, I would like to thank the Standing Committee on Finance and Chairperson Mufamadi for their invaluable contribution. This has included feedback during the briefing process, a productive public hearing process and the comprehensive set of clarifications, corrections and enhancements they have set out in their detailed A-Bill.