The rules contained in the Tax Administration Act are often perceived as boring and even sometimes as irrelevant when compared to taxing acts such the Income Tax Act for example. Few things could be further from the truth! The TAA is a critical piece of tax legislation. Without the TAA, taxing acts such as the Income Tax Act and VAT Act would mean almost nothing, practically speaking. For example, the calculation of taxable income and tax payable as provided for in the Income Tax Act would be superfluous if an assessment can’t be issued to give effect thereto. Assessments are regulated by the TAA. Further still, without notice to the taxpayer of an assessment, no tax debt arises. [1] The rules regarding notice of assessment are contained in the TAA.
We can go further: for most tax acts to function, taxpayers are required to register for that tax and to submit returns which in turn gives rise to assessments – these issues too are regulated by the TAA. Enforcement of underlying tax acts and indeed of the TAA itself are also regulated by the TAA which provides for a wide range of penalties in the case of non-compliance and indeed also for SARS to conduct audits/verifications.
Really, the TAA is pretty much the very thing that make taxing acts function in practice. The TAA is where the rubber hits the road, so to speak, and where practical effect is given to what would otherwise simply be the theory of underlying tax acts.
Perhaps the perception that the TAA is boring stems from its name: the Tax Administration Act? Granted, admin is not generally particularly exiting. But then the stigma of admin is not one that should attach to the TAA. Perhaps a more apt name could have been: The Thing That Makes Other Taxing Acts Work Act (excuse the lack of creativity).
Understanding the rules provided for the TAA is extremely important. Now, one might think it is only of importance to SARS since SARS, after all, is the organisation responsible for, wait for it … the administration of taxes. And yes, it is very important for SARS to know what these rules are and to comply with them. The fact is though that whilst we are sure they try very hard (sometimes) to comply, they often also don’t, in our experience.
How would you know if SARS complies with their “own rules” if you don’t know and understand them yourselves? Do you simply trust that they will comply and that if they don’t, they will always voluntarily admit a mistake and offer (appropriate) reprieve to the unsuspecting taxpayer? I would also like to live in Eutopia, but the fact is we don’t.
Unicus Tax Academy is SAIT accredited CPD training provider which offers 16 hours verifiable output CPD on the TAA. In these courses we cover almost everything from the (practical) start of taxing acts (returns, registrations and assessments) all the way through to how to defend yourselves against incorrect assessments and unfair treatment. The courses are divided into four main modules which are pre-recorded and available on demand. – Check our courses our here
[1] See Singh and Top Watch cases.