Managing expectations when interacting with SARS

Managing expectations when interacting with SARS

• 22 May 2025
• Tax Administration
• Adv Christel van Wyk

Interacting with SARS can often feel daunting, given the complexity of its processes, the multiple communication and interaction channels available, and the various timelines prescribed by law or required by SARS itself.

A sound starting point for taxpayers is to familiarize themselves with their rights and obligations, as well as SARS’ powers and service level commitments outlined in the SARS Service Charter.

On the SARS website, several taxpayer rights and obligations are highlighted. These align with SARS' strategic objectives and include the following:

• Clarity and certainty: Taxpayers should be fully informed of their obligations.
• Excellent service: SARS is expected to provide high-quality service, regardless of the engagement method.
• The right to be heard: Taxpayers must be able to raise complaints and disputes, which should be resolved timeously.
• Fair treatment: SARS must act without fear, favour, or prejudice, and must do so confidentially and within the legislative framework.

However, these rights listed by SARS do not represent the full picture. Taxpayers also enjoy fundamental constitutional rights, most notably:

• Section 34: The right to have legal disputes resolved in a fair public hearing before a court or independent tribunal.
• Section 33: The right to lawful, reasonable, and procedurally fair administrative action, including the right to written reasons for decisions that adversely affect one's rights.

National legislation gives effect to these constitutional rights and mandates mechanisms for reviewing administrative action and ensuring efficient public administration.

Tax Dispute Resolution Framework

The default mechanism for tax disputes is referral to the tax court. If unresolved, disputes can escalate to the High Court, Supreme Court of Appeal, or Constitutional Court. An alternative dispute resolution (ADR) process is also available, offering a more practical and cost-effective solution. These mechanisms reflect the intent of sections 33 and 34 of the Constitution.

A Case Study: Dr X Inc v CSARS (Case No.: 52/2023)

In this recent Western Cape Tax Court matter, the dispute involved SARS’ issuance of a Notice of Invalidity of an objection. One of the key questions was whether this invalidation deprived the taxpayer of their right to access the courts.

The court rejected the argument, deeming it speculative. It held that the taxpayer retained the right to approach the tax court under rule 52(2)(b) of the dispute rules for an order declaring the objection valid. The court emphasized that:

• Section 34 does not guarantee an unrestricted right of appeal to the tax court.
• SARS must first validate an objection; this is a jurisdictional precondition to tax court access.
• The requirement does not unlawfully restrict access to justice but rather reflects the statutory framework.

Whether this matter proceeds to higher courts remains to be seen. A broader question persists: Did the tax court overextend SARS’ discretion to invalidate objections based on formal deficiencies?

Procedural Considerations

SARS operates within strict timeframes. For example:

• SARS must either invalidate an objection or request further documents within 30 business days.
• A decision on a valid objection must typically be made within 60 business days.

In the case above, SARS issued its invalidation notice within the required period. However, concerns arise about whether SARS has unfettered discretion to invalidate an objection simply due to dissatisfaction with the form or format of supporting documents submitted.

This illustrates the challenge in managing expectations when dealing with SARS.

Ensuring Effective Interaction with SARS

Effective interaction requires not just cooperation, but also a perception of cooperation. When SARS requests documentation in a specific form or format, and the taxpayer cannot comply, it is prudent to provide reasonable explanations. If SARS still proceeds to issue an adverse decision, taxpayers may challenge this, potentially through:

• An appeal of the tax court decision, or
• A judicial review to assess the fairness of SARS’ administrative conduct.

In this case, the taxpayer's approach to seek a court declaration validating the objection failed. A resubmission of the same documents would likely lead to the same outcome. Therefore, strategic consideration must be given to the most appropriate legal avenue to pursue.

Conclusion

While SARS outlines a framework of rights and commitments, the interplay between statutory obligations and constitutional rights can be complex in practice. Understanding both the procedural mechanics and legal principles governing tax disputes is crucial for navigating challenges effectively. Taxpayers should remain informed, assert their rights appropriately, and seek legal recourse where necessary to ensure fair treatment in their engagements with SARS.

Discover how to navigate interactions with SARS more effectively through strategic and cooperative approaches in our recorded Webinar on Demand – click here.

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