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Tax Administration Act Enforced With New Definitions
On 1 October 2012, the long-awaited Tax Administration Act (TAA) came into force. As a result several sections of the Income Tax Act (the Act) were repealed and replaced by corresponding provisions in the TAA. Such changes are aimed at consolidating the existing tax administration legislation. The transformation of the administration of tax in South Africa will have consequences for taxpayers, their advisers as well as the South African Revenue Service (SARS). Taxand South Africa focuses on the administration involved, specifically on the definition of 'date of assessment'.
There is no definition of 'date of assessment' in the 'old rules', it is therefore necessary to look to the definition as contained in the TAA. Section 1 of the TAA defines 'date of assessment' as follows:
"in the case of an assessment by SARS, the date of the issue of the notice of assessment".
It is apparent that as a result of this change, the period granted for the submission of an objection has changed and has effectively reduced the time period taxpayers previously had. Now the objection must be filed 30 days after 29 September 2003, which is a reduction of time allocated for a submission of over a month.
Were a taxpayer unaware of this change and followed the old rules in conjunction with the old definition of 'date of assessment', they would have to seek condonation for late filing; which is unlikely to be continuously entertained by SARS on the basis of ignorance of the law.
It is especially important for taxpayers to be aware of the changes that the TAA has introduced as there will be many small amends such as is discussed above, and these will have an impact on filing tax returns. Taxpayers should seek advice where uncertainty arises.