The Office of the Tax Ombud recently helped a taxpayer get a R51 000 customs diesel refund due to him, on which the South African Revenue Service (SARS) had placed a “debt equalisation stopper”.
What was the complaint?
The complainant was a South African dairy farmer dealing with exports, who, upon the submission of the 04/2021 VAT declaration, had an outstanding VAT refund of R1 325 262 and a diesel refund of R51 031. In addition, he had an outstanding pay-as-you earn (PAYE) liability of R53 067 payable to SARS. SARS conducted the required debt equalisation journal entry of R53 067 on June 4, 2021 to settle the PAYE debt. As a result, the dairy farmer was refunded the balance of R1 272 195 on June 6, 2021 for the 04/2021 VAT assessment.
Owing to the delay by SARS to pay out the 04/2021 diesel refund, the taxpayer submitted a complaint to the Office of the Tax Ombud after SARS failed to lift a debt equalisation stopper placed on the diesel account. Furthermore, when a complaint was submitted to the SARS Complaints Management Office on September 3 2021, the CMO incorrectly deemed the complaint resolved.
The matter fell in the Tax Ombud’s mandate and the taxpayer exhausted SARS’s complaint resolution process. For this reason, the complaint was accepted.
The ombud noted that SARS had placed a special stopper on the diesel refund of R51 031 that was still owing to the taxpayer for the 04/2021 assessment.
Recommendations
The OTO submitted recommendations to SARS on October 29, 2021 to lift the stopper and pay out the expected 04/2021 diesel refund or provide the taxpayer with valid reasons for not doing so.
Resolution
On October 29, the case was allocated to the SARS Excise Diesel Team and the matter was then referred to SARS Account Maintenance on to remove the special stopper on the refund. The stopper was withdrawn on November 4 and SARS paid out the diesel refund of R51 031 on the same day.
Conclusion: important lesson
Delays in the payment of refunds continue to be a challenge for taxpayers, and the Tax Ombud reminds affected parties that it is ready to help resolve such complaints against the revenue collector.
This article first appeared in the newsletter Fairness for All issued by the Office of the Tax Ombud.