The Tax Administration Bill 11 of 2011 may face constitutional challenges should it be promulgated in its current form.The Bill gives SARS much wider powers, impacts on taxpayers’ rights andcontains provisions that could affect taxpayers’ rights to hold a passport, to travel and to trade.

Because the Bill gives SARS such wide powers, taxpayers should consult their tax advisors as soon as they are audited or investigated by SARS, assessed, or requested to provide information to SARS. In respect of any interaction with SARS, it is imperative to ensure that the taxpayer’s rights are respected, that SARS complies with its duties and that the taxpayer is not pressurised (‘bullied?”) into providing information or making payments, that it does not have to give or make.

There are areas of great concern:

• SARS can search for, and seize material which the taxpayer regards as subject to legal professional privilege. SARS can appoint an attorney from a panel to take the documents which are alleged to be privileged and to determine within 21 days whether privilege applies. However, there is no guarantee that an attorney who is appointed by SARS, will be independent and there is no reason why the courts should not decide the question of privilege, instead of a SARS appointee.
• SARS powers to gather information have been expanded. SARS can in certain circumstances, conduct a search without a warrant...

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The full article is available in the December/January 2012 Issue of Business Brief and is available in the online magazine. To access this magazine, click here to subscribe