The Right to Just Administrative Action in the Context of Suspending the Payment of Disputed Tax

Silke De Lange, Danielle Van Wyk

Abstract


Section 164(3) of the Tax Administration Act 28 of 2011 (hereafter TAA) provides a senior South African Revenue Service official (hereafter, respectively, SARS and senior SARS official) with discretionary powers to suspend the payment of disputed tax or a portion thereof, having regard to relevant factors, if the taxpayer intends to dispute the liability to pay such tax. Exercising a discretion in terms of section 164(3) of the TAA constitutes administrative action. Section 33(1) of the Constitution of the Republic of South Africa, 1996 (hereafter Constitution) grants everyone the right to just administrative action that is lawful, reasonable and procedurally fair and the Promotion of Administrative Action Act 3 of 2000 (hereafter PAJA) was promulgated to give effect to this right. The objective of this article is to apply the right to just administrative action to the manner in which the discretion in terms of section 164(3) of the TAA is exercised. This is achieved by adopting an explanatory research approach and performing a literature review of the discretion process in terms of section 164(3) of the TAA and the constitutional obligations in terms of section 33 of the Constitution as given effect to in PAJA. As the discretion exercised by the senior SARS official is influenced directly by the right to just administrative action, it should be exercised in a lawful, reasonable and procedurally fair manner to ensure compliance with the Constitution and the PAJA. For the discretion to be exercised in a lawful manner, the senior SARS official must at least be authorised to exercise the discretion in terms of the TAA and comply with the procedures and conditions stated in section 164(3) of the TAA. For the decision to be considered reasonable, the decision must be, at the minimum, rational and proportional, and to ensure that the discretion is exercised in a procedurally fair manner, SARS should comply with at least the relevant compulsory elements in terms of section 3(2)(b) of PAJA. A decision in terms of section 164(3) of the TAA which fails to meet the requirements of lawfulness, reasonableness and/or procedural fairness will be subject to review on several grounds listed in section 6(2) of PAJA.


Keywords


Section 164(3) of the Tax Administration Act; suspension of payment of tax pending objection and appeal; discretion; administrative action; section 33 of the Constitution; Promotion of Administrative Justice Act

Full Text:

PDF XML

References


Bibliography

Literature

Burns Y Administrative law under the 1996 constitution (1998 Butterworths Durban)

Croome B Taxpayers’ Rights in South Africa (Juta Claremont 2010)

De Ville JR Judicial Review of Administrative Action in South Africa (LexisNexis 2003)

Erasmus DN “Commissioner’s discretionary powers”

An analysis of challenging the Commissioner’s discretionary powers invoked in terms of sections 74D and 74B of the Income Tax Act 58 of 1962, in light of the Constitution of the Republic of South Africa 108 of 1996 (PHD-thesis University of KwaZulu-Natal 2013)

Goldswain GK The winds of change - an analysis and appraisal of selected Constitutional issues affecting the rights of taxpayers (PHD-thesis University of South Africa 2012)

Goldswain GK “The Purposive Approach to the Interpretation of Fiscal Legislation: The Winds of Change” 2008 Meditari Accounting Research, Vol.16 No. 2 107-121

Hoexter C “Just Administrative Action” in Currie I and de Waal J (eds) The Bill of Rights Handbook Sixth edition (Cape Town Juta 2013) 644-690

Hoexter C Administrative Law in South Africa Second edition (Juta Cape Town 2012)

Hoexter C and Lyster R The New Constitutional and Administrative Law: Volume Two Administrative Law (Juta 2002)

Keane A The Modern Law of Evidence fifth edition (Butterworths 2000)

Keulder C Does the Constitution protect taxpayers against the mighty SARS? – An inquiry into the constitutionality of selected tax practices and procedures (LLM-dissertation University of Pretoria 2011)

Kotze LJ “Application of Just Administrative Action in the South African Environmental Governance Sphere: An Analysis of Some Contemporary thoughts and recent jurisprudence” 2004 Potchefstroom Electronic Law Journal – issue 1 1-42

Kruger L “Pay now, argue later: New rules for the suspension of Payment” 2014 Business Tax & Company Law Quarterly, 5(2): 27-35

Olivier L “Tax Collection and the Bill of Rights” 2001 TSAR 193-200

Quinot G Administrative Justice in South Africa: An introduction (Oxford University Press 2015)

Routledge Cavendish Constitutional Law fith edition Lawcard Series (Oxford University 2006)

South African Revenue Service Dispute Resolution Guide 28 October 2014

South African Revenue Service Draft Dispute Resolution Guide 14 August 2014

South African Revenue Service Short Guide to the Tax Administration Act, 2011 5 June 2013

Treurnicht M “Changes to criteria considered by SARS when suspending payment of tax” Tax Alert 30 January 2015 2-3

van Wyk D An analysis of the discretion of the SARS and the relevant factors considered following a request for the suspension of the payment of disputed tax in terms of section 164(3) of the Tax Administration Act 28 of 2011 (MAcc(Tax) dissertation Stellenbosch University 2015)

Woof H et al. De Smith’s Judicial Review seventh edition (London: Sweet & Maxwell 2013)

Case law

Administrator, Transvaal v Traub 989 4 ALL SA 924 (AD)

Bangtoo Bros v National Transport Commission 1973 (4) SA 667 (N)

Bato Star Fishing (Pty) Ltd v The Minister of Environmental Affairs andTourism 2004 (4) SA 490 (CC)

Capstone 556 (Pty) Ltd v Commissioner for South African Revenue Service 2011 (6) SA 65 (WCC)) 74 SATC 20

Carephone (Pty) Ltd v Marcus 1999 (3) SA 304 (LAC)

Dawood v Minister of Home Affairs 2000 (3) SA 936 (CC)

Fedsure Life Assurance Limited v Greater Johannesburg

Transitional Metropolitan Council 1999(1) SA 374 (CC)

Gardener v East London Transitional Council 1996 (3) SA 99 ECD

Greys Marine Hout Bay (Pty) Ltd v Minister of Public Works 2005 (6) SA 313 (SCA)

Janse van Rensburg v Minister of Trade and Industry 2001 (1) SA 29 (CC)

Metcash Trading Ltd v Commissioner for South African Revenue Services 2000 63 SATC 13

Metro Projects CC v Klerksdorp Local Municipality 2004 (1) SA 16 (CC)

Minister of Health v New Clicks South Africa (Pty) Ltd 2006(2) SA 311 (CC)

Minister of Defence and Military Veterans v Motau 2014 5 SA 69 (CC)

Minister of Home Affairs v Scalabrini Centre 2013 (6) SA 421 (SCA)

Nieuwoudt v Chairman, Amnesty Subcommittee, Truth and Reconciliation Commission 2002(3) SA 143(c)

Pharmaceutical Manufacturers Association of SA (Assoc Inc in terms of Section 21) in re: the Ex Parte Application of: The President of the Republic of SA 2000 (2) SA 673 (CC)

Preston v IRC 1985 2 All ER 327

Rose v Johannesburg Local Road Transportation Board 1949 (4) SA 272

Sidumo v Rustenburg Platinum Mines Ltd 2007 ZACC 22

South African Commercial Catering and Allied Workers Union v Irvin & Johnson Ltd (Seafoods Division Fish Processing) 2000 (3) SA 705 (CC)

Stroud Riley & Co Ltd v SIR 1974 (4) SA 534 (E)

Legislation

Promotion of Administrative Justice Act 3 of 2000

Tax Administration Act 28 of 2011

South African Revenue Service Act 34 of 1997

Constitution of the Republic of South Africa, 1996

Income Tax Act 58 of 1962

Internet sources

Bothe P 2015 Navraag: Werking in praktyk van artikel 164(2) tesame met 164(3) van die Wet op Belastingadministrasie, e-mail to author, 18 February Available e-mail address: pbothe@sars.gov.za.

Croome B 2015 Procedures governing objections and appeals to SARS http://www.bericcroome.com/2015_04_01_archive.html accessed 8 June 2015

Croome B 2014 The Supreme Court of Appeal Admonishes the South African Revenue Service http://www.bericcroome.com/2014/08/the-supreme-court-of-appeal-admonishes.html accessed 26 January 2015

Croome B 2013 One-Way Traffic with SARS http://www.bericcroome.com/2013/04/one-way-traffic-with-sars.html accessed 26 January 2015

Croome B 2011 New rules containing Section 88 of the Income Tax Act take effect www.ens.co.za accessed 29 January 2015

Klue S, Arendse J and Williams R 2012 Silke on Tax Administration http://www.mylexisnexis.co.za.ez.sun.ac.za/Index.aspx#expired accessed 2 June 2015

Nel P 2015 Navraag: Werking in praktyk van artikel 164(2) tesame met 164(3) van die Wet op Belastingadministrasie, e-mail to author, 18 February. Available e-mail address: PietN@saica.co.za.

PWC South Africa 2015 Tax Administration Laws Amendment Bill (B14 of 2014) will effect amendments to the Tax Administration Act 28 of 2011.

TaxTalk http://www.taxtalk.co.za/tax-administrationlaws-amendment-bill-b14-of-2014-will-effect-amendments-to-the-taa accessed 3 September 2015

SAIT Technical 2014 SAIT How to apply to SARS for a suspension of payment http://www.thesait.org.za/news/201912/How-to-apply-to-SARS-for-a-suspension-of-payment-.htm accessed 25 July 2015

Treurnicht M 2013 SAIT Taxpayers’ rights in respect of a suspension of payment of tax http://www.thesait.org.za/news/135256/Opinion-Taxpayers-Rights-In-Respect-Of-A-Suspension-Of-Payment-Of-Tax-.htm accessed 29 January 2015




DOI: http://dx.doi.org/10.17159/1727-3781/2017/v20i0a1528

Refbacks

  • There are currently no refbacks.


Copyright (c) 2017 Danielle van Wyk

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.