Soon the South African Revenue Service will have the power to search and seize relevant material without the need for a warrant, a tax expert has today told the City Press. The Tax Administration Bill could “have serious and significant ramifications” for taxpayers, the expert continued. However, this doesn’t appear to be a bad thing, if you’ve got nothing to hide.

Beric Croome, a tax executive at Edward Nathan Sonnenbergs told the City Press today that he expected the legislation to come into effect within the next four to six weeks. Though it was likely certain parts of the legislation would only take effect on different dates, as it would be extremely difficult to put all of it into effect immediately, he explained:

SARS has a duty to uphold the tax laws of South Africa. Previously, if serious tax evasion (was) identified during a SARS audit, there was no power to seize documents which would have assisted SARS immediately, with the result that the evidence was likely to disappear by the time a warrant was eventually granted.

There was a proposal that any documents that are seized by SARS without a warrant should then be given to the court, which would then determine whether access to these documents should be granted; however, this was not accepted.

This he said presented the concern about the possibility of the abuse of this power.

However, he welcomed the inclusion of a Tax Ombud. The ombud would be accountable to the minister of finance, and should help to alleviate concerns slightly. The ombud would also be paid out of the SARS budget.

We welcome the appointment of an ombud to deal with tax affairs; however, for this to be successful, the appointment will be critical. This is similar to the model that has been adopted in Canada and the United Kingdom and should help to create a level of independence.

Ernie Lai King, a director at Edward Nathan Sonnenbergs, also welcomed the ombud move, and said the value or success of the ombud would depend heavily on the character of the person appointed. The ombud should have a good background in both customer service and law.

Hopefully, this appointment will assist in the process of dealing with disputes arising from tax issues and not prove to be yet another layer of administration.

You can run, but you cant hide.

[Source: CityPress]