Day / July 5, 2012

by Mike Poverello

New Tax law to give SARS upper hand

Taxes

News24.com reports that legislation allowing the SA Revenue Service (Sars) to search business premises without a warrant is expected to come into operation within the next three months. The Tax Administration Bill was promulgated into law on Wednesday in the Government Gazette, Sars said in a statement on Thursday.

The act will come into operation on a date to be determined by the President  by proclamation in the gazette.

“Sars’s preparations for the implementation of the act are at an advanced stage and it is anticipated that it will come into operation within the next three months,” it said.

The act was intended to simplify and provide greater coherence in South African tax administration law. It eliminated duplication, removed redundant requirements, and aligned existing disparate requirements in different tax acts ranging in age from four to 63 years old. It created a single, modern framework for the common administrative provisions of the tax acts.

“Most taxpayers are compliant, and the act should ensure better service and a lower compliance cost for them,” Sars said. “Sars is, however, duty-bound to actively pursue tax evaders in order to maintain compliant taxpayers’ confidence in the integrity of the tax system.”

Key features of the act include:

  • A move to a single registration process and number across taxes to reduce red-tape and streamline the system, and self-assessment of taxes so taxpayers need not wait for a Sars assessment;
  • Greater access to third-party data to underpin Sars initiatives, such as the pre-population of individual tax returns;
  • Clearer rules on Sars access to information, so tax liabilities can be determined more quickly and accurately;
  • The ability to search business premises without a warrant in narrowly-defined situations, where the general requirement for a warrant will defeat the object of the search, so Sars can act when tax is at serious risk and time is of the essence;
  • Clear requirements and timelines for issuing tax clearance certificates to provide greater certainty and responsiveness to business;
  • Feedback on audit progress and findings to engage more fully with taxpayers and ensure they understand the reasons for any adjustments;
  • 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; and
  • The appointment of a Tax Ombud, informed by international experience, to provide taxpayers with a low-cost mechanism to address administrative issues that cannot be resolved through Sars’s normal channels.

Although the act provided for a year from its commencement for the appointment of the Tax Ombud, Finance Minister Pravin Gordhan announced in his 2012 Budget speech that the ombud would be appointed this year. Source: News24.com

“Sars is, however, duty-bound to actively pursue tax evaders in order to maintain compliant taxpayers’ confidence in the integrity of the tax system.” 

Who is going to pursue corruption and wasteful expenditure in order to maintain the citizens confidence in paying tax in the first place?

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by Mike Poverello

Public Office – a way to pillage the state?

The following article featured in the Business Day highlights the endemic problems of a moral-less society with an unbridled desire to attain wealth at all costs. True this is not just a South African problem, one just has to look at the corrupt activities of ‘politicians’ and ‘big western bankers’ to realise the despair that has  been wrought for so many unwitting citizens, many of whom face a future of utter misery. With so much talk of anti-corruption measures and witch-hunts against whistleblowers, the article provides a down-to-earth explanation as to what it means to hold public office.

The abuse of public power and the plundering of state resources have become so pervasive in SA that events such as these can no longer be regarded as isolated episodes of delinquent public officials, each acting individually. Instead they should rather be ascribed to a political culture born of a profound misconception of the very notion of public office, held by sizeable numbers of public office-bearers ranging from the highest echelons of the executive to junior police officers and public servants. This misconception causes office-bearers to act in a way that is diametrically opposed to what public office requires.

Public office bestows power and authority on the public office-bearer. It demands that citizens recognise and yield to the authority that accompanies it, be it the meagre authority of the junior public servant, the often intrusive authority of the policeman, or the far-reaching authority of the president or ministers. Public office commands respect by virtue of the power vesting in the public office-bearer and from the fact that public office-bearers do not act in their own interest but in pursuit of the public good. But the rewards that accompany the highest positions of public office extend much further. They are publicly applauded and venerated or placed in a position to receive these honours.

However, there is a stark flip side to the public office, which is as essential to public office-bearing as the power and rewards that come with it. This is that the authority and honour of public office are rooted in a profound sacrifice, requiring the office-bearer to sacrifice his private self for the sake of the public good. The higher the public office, the more drastic the sacrifice of the private self must be.

These two aspects are equally vital to public office: the power and the honour as well as the sacrifice of the office-bearer’s private self. The state is rooted in this two-pronged premise and its survival depends on it. Hence, public office does not turn the office-bearer into some magnified private person, entitling him to private gain that is beyond the reach of the ordinary private person. Public office-bearers must sacrifice the private self for the sake of, and in exchange for, public authority.

The occupant of public office discharges his responsibilities strictly in accordance with the prescribed script of the public office concerned; he must act lawfully in accordance with the precepts of the office in question. This is not to say that he must act mechanically, because the way in which public office is discharged may vary from mediocre to exceptionally virtuous, yet always within the confines of the script of the office concerned. Hence, the office-bearer may never act outside the powers inherent in the relevant public office as laid down in law, leaving no space for private detours beyond the ambit of the script.

But there is mounting evidence of a deviant culture that is causing public office in this country [South Africa] to be widely and profoundly misunderstood by many incumbents, identifying it with only its first aspect — its power and honours — yet ignoring and rejecting the second and equally essential aspect — the service to the public good and the sacrifice of the private self.

In fact, precisely the reverse seems to be identified with public office, namely that public office somehow entitles public office-bearers to exploit the power and authority of public office to achieve maximum private gain for the office-bearer — and to receive public accolades for these “successes”. When this occurs, the public office-bearer becomes the exact opposite of what he should be, namely a freebooter, a privateer, harming the public good and robbing the state. And when privateering increases as the evidence of a culture of abuse of public office for private gain is mounting, the gloomy prospects of a faltering state loom large. The larger the number of these privateers, the more the state descends into an assemblage of competing marauders rendering patronage to their own retinue with no regard for the rest, who have to fend for themselves while witnessing the unfortunate spectacle of the receding state. Article by: Koos Malan, professor of public law at the University of Pretoria – Business Day news paper July 2012.

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