A significant change has been implemented with respect to the appeals process available to taxpayers where they disagree with any assessment raised by the Eswatini Revenue Service. The Revenue Appeals Tribunal Act, 2019 introduces new measures and processes for tax appeals.
New appeals body
As part of the new changes, a new body the Tax Appeals Tribunal of Eswatini (RATE) has been created, it is now operational and receiving cases effective 15 November 2022. It is understood that appeal cases which arose prior to 22 November 2019 are excluded as such appeals are time barred (i.e. before the day of coming into effect of the Revenue Tribunals Act).
This body has been put together with a view to strengthening the independence of the appeals process and to remove the potential for biased adjudications as a result of the involvement of ERS in the appeals process. The RATE has published the rules of the organisation (see attached) and same are to be reviewed on an ongoing basis. It is intended that the RATE will facilitate appeal proceedings which are independent, fair and overall accessible. The overriding intention in establishing the RATE is to process and determine appeals as efficiently as possible without the formality of a court setting.
New procedure
The time allowed for making an appeal has been standardised at 30 days after the notification of the assessment/decision the Commissioner General ("CG") of ERS. It is not yet possible to submit the notice of appeal online through the website www. rate.org.sz., only physical are submissions are accepted for now.
On the initial notice of appeal, a significant amount of information is required to be included and with only 30 days to decide whether to appeal, gather the information and submit the appeal, time is of the essence.
The notice must be in a prescribed form (see attached) and should include the grounds of appeal raised at objection stage, the relevant legislation, and the supporting case law. Failure to identify the grounds of appeal at this stage could limit the scope of the appeal at hearing. While there is an option to apply for inclusion of additional grounds of appeal at a later stage, it must be shown that it could not reasonably have been stated in the notice at the time it was submitted.
Once an appeal has been accepted, the RATE will direct the preparation of a "statement of case" by the taxpayer and may also request one from the ERS. This statement will set out the facts, list of documents to be relied on, details of any witnesses, statutory provisions to be relied on, details of any relevant case law and an estimation of the duration of the appeal.
At this point it is unclear whether there will be a preliminary hearing or case management conference to reconcile or net the issues to be heard and deal with any preliminary applications.
Once the RATE has heard the appeal it is unclear how long should the parties wait before RATE issues a determination of its decision. The legislation calls for all determinations of the RATE to be anonymised and it is understood that they will be made available on their website. The publication of these determinations going forward will bring improved certainty to the interpretation of the law for practitioners and taxpayers alike.
It is further understood that there is some scope under the Tribunal Act for the ERS to give evidence in support of increasing the scope of their assessment. There is currently no right of rehearing available to taxpayers and thus, in the event of seeking a further appeal, the only option for now is for a taxpayer to bring a costly High Court challenge on a point of law. This, as a matter of fact, limits the scope for taxpayers to engage in the legal system as a means of defending their position. We understand that it is still only a few taxpayers who would be in a financial position to bring a High Court challenge unless out of absolute necessity.
Point of law challenge
The procedure for bringing a challenge requires that a case stated for the opinion of the High Court must be prepared by either the Taxpayer or the ERS / and not RATE, but with a cross notification to the other party. Any such appeal must be brought within 30 days of determination.
Conclusion
It is our view that while the Tribunal may attempt to introduce enhanced efficiency and independence of process, there is an argument that the taxpayer is being denied any real access to justice in circumstances where a decision of the RATE may not be fair, just or well assessed.
In the absence of recourse to the Circuit Court – an appeals Court for the RATE, there is the potential for erroneous decisions of the RATE to go unchallenged, due to prohibitive costs of a High Court challenge. It is not feasible for the majority of taxpayers to bring a High Court judicial review or challenge in circumstances where they feel they are aggrieved; and it is arguable that in the vast majority of cases, most taxpayers will de disinclined (as in afraid) to pursue a matter any further for fear of being unsuccessful.
Thus, we would highlight the need for proactive consultation with your tax advisors where an appeal is being considered. It is vital going forward that the strongest possible case be made to the RATE in order to eliminate the potential for future costly litigation. At SNG Grant Thornton we are available to support you and to ensure that the opportunity to challenge tax assessments is not missed.
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.
