Navigating Sars assessments

WHILE it is entirely within a taxpayer's rights to contest the outcome of a South African Revenue Service (Sars) assessment, doing so requires thorough preparation.

- AZWINNDINI MAGADANI

This means ensuring that documentation is accurate, consistent, and properly presented, and that the explanation they provide does not change.

Without this, the prospects of success are limited, and taxpayers may face additional penalties alongside the disputed tax.

Taxpayers who disagree with a Sars assessment or audit have a well-established process to follow, beginning with a request for the reasons behind the additional assessment. This is often a crucial step, as it clarifies Sars’s reasoning and enables the taxpayer to prepare a formal objection.

An objection must be lodged within 80 business days of receiving the assessment, either through Sarss eFiling system or at a branch. Sars may allow the objection in full, partially allow it, or reject it, and will communicate the outcome in writing. If dissatisfied, the taxpayer may lodge an appeal at the Tax Court, which will require a carefully developed position supported by evidence. By mutual agreement, Sars and the taxpayer may attempt to resolve the dispute through alternative dispute resolution (ADR). During the ADR process, proceedings on the appeal are suspended pending the outcome of the ADR process. The Tax Court is not a forum where incomplete or inconsistent arguments succeed. It has full powers to confirm an assessment, and any further appeal would require approaching the Supreme Court of Appeal at significant cost.