Abstract
The "pay now, argue later" rule entails that the obligation to pay tax and the right of the South African Revenue Service (SARS) to receive and recover tax are not suspended by objection or appeal. However, in terms of section 164(2) of the Tax Administration Act 28 of 2011 (hereafter TAA), a taxpayer may request a senior SARS official to suspend the payment of disputed tax and a senior SARS official may, in terms of section 164(3) of the TAA, grant such a suspension having regard to certain relevant factors. Section 164(5) of the TAA further provides that the decision to suspend may be revoked on a number of grounds. One of the grounds is when a senior SARS official is satisfied, on further consideration of the factors which had to be taken into account when the suspension was granted, that the suspension should not have been granted. There is no indication in the TAA that this ground for revoking the suspension requires that there should be a material change in the factors, as this is provided for in a separate ground to revoke the decision to suspend the payment of disputed tax. It is also not required, for example, that the taxpayer should have failed to disclose information when making the request to suspend the payment. It is argued in this article that the ground for revoking a decision to suspend payment "on further consideration of the factors" raises concerns from an administrative law point of view. This is based on the revocation being an "administrative action" as contemplated in section 33 of the Constitution of the Republic of South Africa, 1996 read together with the Promotion of Administrative Justice Act 3 of 2000, which requires that the revocation should be lawful, reasonable and procedurally fair. The concerns raised in this article relate not only to the rights of taxpayers, but also to the duties of the SARS officials revoking a decision to suspend payment as it is equally important that administrators should be able to know how and when to act in a manner which is lawful, reasonable and procedurally fair.
Highlights
There is no indication in the TAA that this ground for revoking the suspension requires that there should be a material change in the factors, as this is provided for in a separate ground to revoke the decision to suspend the payment of disputed tax
As mentioned in paragraph 1 above, it is argued that paragraph (c) (like paragraph (c) of section 830(5) of the Customs Control Act)[33] is problematic, 29 For example, South African Revenue Service (SARS) may withdraw an assessment in terms of s 98(1) of the TAA if it was issued to the incorrect taxpayer
A possible application of paragraph (c) as a valid exception to the functus officio doctrine is provided in paragraph 3.1.3 below, together with suggestions to amend the legislation in paragraph 4 below
Summary
The use of "if satisfied that" in section 164(5) of the TAA confers a subjective discretion on the senior SARS official to revoke a decision to suspend payment.[5] The grounds for a revocation listed in paragraphs (a) and (b) of section 164(5) of the TAA (when there is a frivolous objection or appeal, a vexatious objection or appeal or when the taxpayer is employing delaying tactics) are justifiable (and this could perhaps relate to the merits referred to in the SARS Dispute Resolution Guide mentioned in the paragraph above). In order to put the current paragraph (c) into perspective, a brief historical and comparative analysis follows
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