Hon Chairperson, the drafting of the Tax Administration Bill was announced in the 2005 Budget Review as a project to incorporate into one piece of legislation certain generic administrative provisions that are currently duplicated in the different tax Acts. Tax legislation comprises two aspects, namely tax liability provisions and tax administration provisions. The drafting of the Tax Administration Bill focuses on reviewing the current administrative provisions of the tax Acts administered by the SA Revenue Service, Sars, but excludes the Customs and Excise Act of 1964.
The current tax framework needed to be aligned with modern approaches, business practices, accounting practices and constitutional rights. In essence, the rationale for a tax administration review in South Africa is to adapt to a fast-developing world and lower the cost and burden of tax administration. A modern legislative framework is required. Why? It is to modernise the administration of the collection of revenue; consolidate duplicate provisions; adjust disparate requirements in existing law; and achieve a balance between the powers and duties of Sars and the rights and obligations of taxpayers.
The Tax Administration Bill seeks to effect protection of administrative fairness rights through affording taxpayers more effective and overarching remedies, such as the creation of a tax ombudsman's office. There are also specific procedural rights in the clauses dealing with the powers of Sars, such as the right to audit the findings report after the finalisation of an audit and providing reasons for the assessments. Due regard was given to the principles of equity and fairness, certainty and simplicity, efficiency and effectiveness.
The purpose of the Tax Administration Bill is the extension of powers to more effectively target tax evaders who demonstrate certain behaviour.
The Tax Administration Bill was also informed by international best practice and the comparative evaluation of the tax administration laws of other countries with practical experience of tax administration laws over long periods, such as Australia, Botswana, Canada, New Zealand, the United Kingdom and the USA.
The following issues were raised in the committee. The Office of the Tax Ombudsman must be seen to be independent - and not only theoretically - and it has to report to the Minister of Finance. The Tax Ombudsman's Office should recruit personnel freely and independently from Sars. The jeopardy assessment should be approved by the Tax Ombudsman. Lastly, the burden of proof for jeopardy assessments to be on Sars is supported, as it will be made available to the Tax Ombudsman, which makes sense. It was agreed in the committee that, after consultation with the Minister of Finance, the Minister would respond to the issues raised in the committee as soon as possible.
Hon Chairperson, Edmund Burke said, and I quote:
To tax and to please, no more than to love and to be wise, is not given to men.
Hon Chairperson, the Select Committee on Finance, having considered and examined the Tax Administration Bill [B 11B - 2011] (National Assembly - section 75) referred to it and classified by the JTM as a section 75 Bill, supports the Bill without amendments. I so move.
Debate concluded.
Question put: That the Bill be agreed to.