Experts slam Sars estimates

PROVISION: IN THE TAX ADMINISTRATION ACT

- Amanda Visser

The SA Revenue Service (Sars) has the power to raise estimated assessments when the information supplied by a taxpayer is considered incorrect or inadequate. The subjectivity of the parameters used when issuing estimated assessments makes the provision subject to abuse, argues Nico Theron, founder of Unicus Tax Specialists.

The Tax Administration Act authorises Sars to issue an estimated assessment if a taxpayer fails to submit a return; submits a return or relevant material that is incorrect or inadequate; or fails to respond to requests for relevant material.

If any of these requirements is unmet, Sars may issue an estimated assessment, which is then based on its own calculations of the taxpayer's liability, says Max-Prof auditor Debora Motana in an article.

Troubling Theron finds the subjective nature of the parameters for inaccurate returns or information or inadequate returns or information troublesome.