South Africa's New Tax Administration Act Is In Force

by Lorys Charalambous,, Cyprus

04 October 2012

The South African Revenue Service (SARS) has announced that the Tax Administration Act (TAA), which is intended to simplify and provide greater coherence in South African tax administration law, and was promulgated on July 4, 2012, largely came into effect on October 1, 2012.

The TAA is said to eliminate duplication, remove redundant requirements and align disparate requirements that had previously existed in a number of different tax acts. It is meant to create a single, modern framework for the common administrative provisions of the country’s tax code.

It also aligns SARS with international best practice and modern tax administration. Crucially, the TAA seeks to achieve a balance of rights and obligations between the South African taxpayer and SARS itself. Extensive consultation was carried out, with the widest possible range of stakeholders, and their inputs were taken into consideration throughout the drafting process.

Other objectives of the TAA are that it should provide a foundation for the future modernisation and development of tax administration in South Africa, such as single registration and self-assessment, and result in greater access to third party data to underpin SARS’ initiatives, such as the pre-population of individual tax returns.

SARS is committed to the smooth roll-out and implementation of the TAA, and has been preparing in this regard for some time. In August this year, it issued a short guide to provide assistance for taxpayers to understand their obligations and entitlements under the new legislation.

For example, it is pointed out in the guide that some administrative provisions, that only apply and are unique to the administration of a specific tax type, remain in the legislation imposing that tax. In certain instances, therefore, both the TAA and another tax act may prescribe administrative procedures for the same tax, and a taxpayer must comply with both.

When it was gazetted, SARS spokesperson Adrian Lackay confirmed that the TAA “eliminates duplication, removes redundant requirements and aligns disparate requirements that currently exist in different tax acts ranging in age from four to 63 years old… (and) creates a single, modern framework.”