how to save millions in business - sars
18 January 2008

“Lawyers often receive instruction to take over a dispute where it has proceeded to a point where a hearing with the Tax Board or Court is inevitable,” says Erika Petersen of Shepstone & Wylie Attorneys tax department.

In particular, the Income Tax Act has recently seen the introduction of alternative dispute mechanisms and compromises, which provides that SARS may settle any tax debt, including interest and penalties owed where the costs of litigation and prospects of failure outweigh benefit of settlement.  Alternatively, SARS may waive, write-off or compromise a tax debt if it cannot be recovered through legal action or if the debtor is liquidated or sequestrated.

In addition, says Petersen, the SARS Service Monitoring Office is a forum to address grievance regarding the conduct of any SARS official, including a failure to observe stipulated time periods.  “We have also recently seen the introduction of advance tax rulings which are binding on SARS, provided the applicant implements a proposed transaction in the same manner set out in the application and makes full and complete disclosure in the application.”

On receipt of a tax assessment under dispute, the correct procedure is to submit an objection letter, setting out in full the grounds for your objection which should be motivated by applicable legal argument.

Petersen advises that it is important for a consistent argument to be carried forward in all subsequent pleadings.

If the objection is not allowed by SARS, an alternative dispute resolution hearing may resolve the matter, failing which any of the above settlement processes or litigation may be appropriate.
 
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