Refund delays persist says Tax Ombud
If your clients’ refund delay is due to Tax Ombud-identified systemic issues, such as not adhering to dispute resolution timeframes and delays in lifting stoppers, you can approach the Ombud directly.
The value of the top ten refund cases where the Office of the Tax Ombud intervened to assist taxpayers with their refund payouts was over R215 million in the 2021 financial year.
“Delays in the payment of tax refunds continue to affect taxpayers,” according to a recent media statement by the Ombud. “This is despite the Tax Ombud identifying certain root causes of the delays as systemic issues – meaning problems that are regarded as the underlying cause of a tax complaint that affects or will affect a number of taxpayers.”
The Ombud referenced a 2022 case involving a R70 886 refund it assisted with as an example. The case included two systemic issues: SARS’ delay in lifting ‘stoppers’ and non-adherence to dispute resolution timeframes.
“When the root cause of a taxpayer’s complaint has been listed as a systemic issue, taxpayers do not have to exhaust the SARS internal complaints resolution mechanism and can lodge a complaint directly with the OTO,” notes the statement. “For example, you can approach us directly when a delay in the payment of tax refunds is due to SARS omitting to lift a stopper placed on the account.” The Tax Ombud currently lists ten systemic issues on their website.
In the 2022 case, the taxpayer had an outstanding refund of R93 386. However, the taxpayer also had administrative penalties of R22 500 because of the late filing of tax returns.
“On 6 August 2022, SARS indicated that part of the refund would be offset against the administrative penalty and the rest would be paid out. However, the revenue authority then failed to finalise the debt equalisation and objections, and did not pay out the refund.”
The taxpayer then asked for the Ombud’s help, and the Ombud recommended that SARS finalise the matter. SARS paid out the remaining refunds by 11 March 20223.
