Revoking a Decision to Suspend Payment of Disputed Tax "on Further Consideration": An Administrative Law Perspective

Authors

DOI:

https://doi.org/10.17159/1727-3781/2021/v24i0a7612

Keywords:

Tax administration, Tax Administration Act, pay now argue later, suspension of payment of disputed tax, administrative action, revoking a decision, functus officio

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.

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References

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Literature

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Case law

Capstone 556 (Pty) Ltd v Commissioner for SARS 74 SATC 20

Carlson Investments Share Block (Pty) Ltd v Commissioner for SARS 63 SATC 295

Commissioner for SARS v Miles Plant Hire (Pty) Ltd 76 SATC 1

Dawood v Minister of Home Affairs; Shalabi v Minister of Home Affairs; Thomas v Minister of Home Affairs 2000 3 SA 936 (CC)

Metcash Trading Ltd v Commissioner for SARS 63 SATC 13

Legislation

Constitution of the Republic of South Africa, 1996

Customs and Excise Act 91 of 1964

Customs and Excise Amendment Act 32 of 2014

Customs Control Act 31 of 2014

Income Tax Act 58 of 1962

Promotion of Administrative Justice Act 3 of 2000

Tax Administration Act 28 of 2011

Tax Administration Laws Amendment Act 21 of 2012

Tax Administration Laws Amendment Act 39 of 2013

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GN 550 in GG 37819 of 11 July 2014

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South African Revenue Service 2011 Memorandum on the Objects of the Tax Administration Bill, 2011 https://www.sars.gov.za/AllDocs/Legal

Doclib/ExplMemo/LAPD-LPrep-EM-2011-03%20-%20Memorandum%20

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Published

2021-02-11

How to Cite

De Lange, S. (2021). Revoking a Decision to Suspend Payment of Disputed Tax "on Further Consideration": An Administrative Law Perspective. Potchefstroom Electronic Law Journal, 24, 1–26. https://doi.org/10.17159/1727-3781/2021/v24i0a7612

Issue

Section

Articles