Even tax collection needs to respect due process – NCF

8 July 2010

SARS needs to respect the rule of law before it starts dipping into consumers’ bank accounts, according to the National Consumer Forum.

Thami Bolani, the chairman of the NCF, said that recent threats by SARS had unnerved consumers because it was not clear what processes were in place to protect them against unilateral action by SARS.

SARS commissioner Oupa Magashule warned last week that taxpayers with multiple outstanding returns would be targeted by the administrative penalty system that came into force in January last year.

“Everyone recognises the need to pay tax, and the importance of taxes in meeting the development needs of the country,” said Bolani. “But we live under a constitution that protects our right to be assumed innocent until proven guilty. Every government agency and every business needs to have fair and transparent processes in place – which allow consumers to present their case – before any action is taken.”

Bolani said consumers were concerned about the possibility that SARS could ‘raid’ their bank accounts unilaterally and without consultation. “While SARS has tried to assure the public that this is not their intention, the idea suggests that we are retreating from our commitment to constitutional principles,” he said. “If the possibility exists that money can be taken directly from your bank account, then consumers can be justifiably nervous about mistakes being made that will jeopardise their financial security.”

He said that SARS needs to make its systems and procedures very clear for everyone to understand, so that it does not create the wrong impressions about what it plans to do. It is vital that consumers’ rights are not compromised, he said, even when SARS needs to take direct action to recover unpaid taxes.

“Consumers are also very aware that the collection of taxes is generally a highly efficient and skilled operation, whereas the same cannot be said of many government institutions that spend our taxes,” said Bolani. “This adds to the widely-held perception among consumers that government collects our money more efficiently than it spends it.”

SARS said that it has already issued over 200,000 notices to taxpayers with outstanding returns for multiple years.

Posted in Media Statements.