Critical for credibility and the protection of taxpayer rights.
A cornerstone for the credibility of the Office of the Tax Ombud (OTO) is its independence from the South African Revenue Service (Sars).
This is critical for its effectiveness and a major focus of its 2025-2030 Strategic Plan – with the OTO wanting to achieve greater autonomy through governance and legislative changes, says Tax Ombud Yanga Mputa.
It is crucial that the OTO remains responsive, innovative and dedicated to upholding the rights of taxpayers; a fully independent ombud can advocate effectively for taxpayer rights without conflicts of interest.
“In contrast, an OTO that is embedded within Sars may have limited authority and face challenges in maintaining impartiality and autonomy,” Yanga says in the five-year strategic plan.
“Ensuring independence is critical in fostering better public perception and trust in the OTO, thereby enhancing the OTO’s ability to protect taxpayer rights and ensure fair tax administration.”
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Systemic investigations
She also notes that collaboration with stakeholders – such as tax practitioners, recognised controlling bodies and National Treasury – is vital to improve the tax administration system.
The OTO has completed its systemic investigation into a multitude of complaints about taxpayer and tax practitioner eFiling profile hijackings. This is the third systemic investigation completed by the OTO since its inception in 2013.
As part of its mandate, the OTO can initiate an investigation into any systemic and emerging issue related to a service, procedural or administrative matter, or the application of the provisions of the Tax Administration Act. Although the OTO has the power to initiate a systemic investigation, it still requires the approval of the minister of finance.
Mputa will be holding a virtual workshop this week following the October publication of the draft report into the alleged profile hijackings investigation.
Her office invited public comments on the draft report and will discuss issues raised in the written comments. Systemic investigations play a crucial role in addressing “recurring, widespread, and potentially unfair practices” by Sars that affect multiple taxpayers.
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Some of the findings in the draft hijacking report include:
- Incidents of eFiling profile hijacking are common in personal income tax followed by value-added tax (Vat);
- The estimated value of fraud in most eFiling profile hijacking cases is below R10 000, but a considerable number also fall within the R10 000 to R100 000;
- Challenges with fraud detection and slow response mechanisms allow hijackers to access and misuse eFiling profiles undetected;
- Taxpayers and tax practitioners encounter ineffective communications channels and limited support from Sars when trying to resolve eFiling profile hijacking cases;
- Fraudsters continue to open fraudulent bank accounts, particularly with digital banks, and redirect fraudulent tax refunds from Sars into these bank accounts; and
- There is alleged internal fraud and insider involvement.
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Ineffective communication
The 2025 PwC Taxing Times survey mirrors some of the findings in the draft report of the OTO into the eFiling profile hijackings.
Although Sars is making huge strides in digital transformation and enforcement efforts, taxpayers are finding it increasingly difficult to get a direct line of communication to Sars.
PwC published its 8th Taxing Times survey in November, reflecting the views of corporate taxpayers about their interactions with Sars in terms of turnaround times with audits, refunds and voluntary disclosure applications.
The survey indicates that Vat refunds are processed faster and more consistently, some audits are resolved quicker, and eFiling and automation is more efficient.
However, concerns remain about Sars missing its own deadlines, dispute resolution being slow, and despite taxpayers responding to repeated information requests from Sars, the revenue service’s response remains “minimal”.
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Compliance fatigue
Corporate taxpayers also noted that poor communication via the call centres and digital platforms remain an “ongoing concern”.
Delayed resolutions and unclear communication contribute to ongoing “frustration and compliance fatigue”.
According to the 2024/25 Annual Report of the OTO, almost 80% of the complaints it received from taxpayers related to service matters and 10% to procedural matters. The OTO experienced an increase of 7.25% in complaints relating to service matters during the reporting period.
“This indicates that while more taxpayers are engaging with Sars, a large proportion still experience unacceptable delays or non-responsiveness.” A 16% decline in procedural complaints during the period under review suggests some improvement in Sars’s adherence to processes.
This article was republished from Moneyweb. Read the original here.
