Most Read Contributor in South Africa, September 2016
The draft Tax Administration Laws Amendment Bill of 2015
("TALAB"), published for public comment
on 22 July 2015, proposes the introduction of a new section 42A
into the Tax Administration Act No. 28 of 2011
("TAA"), dealing with the procedures to
be followed where legal professional privilege
("Privilege") is asserted by a taxpayer.
These procedures are particularly onerous on the taxpayer and may
result in undue delays in the tax dispute resolution process,
particularly in relation to discovery proceedings.
The proposed section 42A provides that, if Privilege is alleged
in respect of relevant material required by the South African
Revenue Service ("SARS"), the person
alleging Privilege must submit certain information to SARS at the
place, in the format and within the time specified by SARS. This
a description of each document in
respect of which Privilege is alleged;
the author of the document, if the
author is not a legal practitioner;
if the author is a legal
practitioner, their name and the capacity in which they were
the specific purpose of the legal
advice or in connection with what it was given;
the name of the client to whom the
legal advice was provided;
confirmation in writing that the
client is claiming Privilege in respect of the document; and
if the document is not in possession
of the abovementioned client, the identity of the person from whom
it was obtained and the instructions from that person regarding the
Once SARS has received this information, it may dispute the
allegation of Privilege by arranging with a member of the panel of
advocates and attorneys constituted in terms of section 111 of the
TAA to take receipt of the relevant document/s. The person alleging
Privilege will then be obliged to hand over sealed copies of the
relevant document/s. Thereafter, the panel member will make a
determination (which is subject to challenge on application to a
High Court) as to whether or not Privilege applies.
Given the potential timing implications which the proposed
section 42A may have on ongoing and future tax dispute resolution
proceedings, it may become necessary (where possible) for taxpayers
and their legal practitioners to pre-emptively compile the required
information in relation to Privileged material, prior to an
anticipated request for information being received from SARS.
Alternatively, taxpayers will have to ensure that these onerous
processes are taken into account when contemplating the various
time frames within which required relevant material must be
delivered to SARS, and the potential duration of tax dispute
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The expansion of the West African regional market to foreign investors, and the search for emerging markets has led to a continuous increase in business mobility and cross border investments with Nigeria.
Effective collaboration amongst government agencies, automation of processes and capacity building by tax authorities have always been identified by stakeholders as strategies for achieving an efficient tax system.
The major objective of the waiver is to promote voluntary compliance and consequently generate revenue for government which otherwise, could have been lost.
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