Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 7.3)

Posted in sections, this is my Doctoral Thesis on taxpayers rights when audited by the tax authorities in South Africa – equally applicable to many English-based law systems in Africa and abroad (eg. India). This will be of particular use to any tax practitioners doing work in Africa and in other English-based legal systems around the world.

Analysis of Challenging The Commissioner’s Discretionary Powers In Auditing Taxpayers under The Constitution of The Republic of South Africa



The specific constitutional provisions are those set out in s 195(1) of the Constitution as analysed in Chapter 4 supra, which in summary are: ‘(a)A high standard of professional ethics must be promoted and maintained…(d)Services must be provided impartially, fairly, equitably and without bias…(f)Public administration must be accountable.(g)Transparency must be fostered …’.(Emphasis supplied)

These provisions are constitutional obligations, and the failure by SARS to adhere to any of them, read with the Code of Conduct and the SARS Internal Audit Manual, will result in conduct that is inconsistent with the Constitution, and invalid. The cause of action in an application to the High Court in terms of Rule 53 for review of SARS’ conduct will either be one or more of the codified grounds of review in s 6(2) of PAJA, or, alternatively the principle of legality.

The codified grounds of review in s 6(2) of PAJA fall into nine principal groups, namely: authority and conduct of the administrator non-compliance with a mandatory and material procedure or condition; procedurally unfair action; action materially influenced by an error of law; manner of exercise of administrative action; grounds; failure to take a decision; unreasonableness; and otherwise unconstitutional or unlawful action. These nine principal areas of review exclude the two common-law grounds of review that would probably fall under s 6(2)(i) (otherwise unconstitutional or unlawful action),11 namely vagueness and the ‘fettering by rigidity of a discretion’.12

The constitutional principle of legality requires SARS to act lawfully, reasonably, procedurally fairly, and to give reasons where appropriate, in exercising public powers.




11 Sections 6(2)(a), 6(2)(b), 6(2)(c), 6(2)(d), 6(2)(e), 6(2)(e), 6(2)(f), 6(2)(g), 6(2)(h), 6(2)(i) and 6(3) of PAJA.
12 Hoexter C The Future of Judicial Review in South African Administrative Law South African Law Journal (2000) Vol 17 at page 497. See also: US v Williams 337 F Supp 1114; Local 174 International Brotherhood of Teamsters v US, 240 F.2d 387; US v Newman 441 F.2d 170; US v Coopers and Lybrand F Supp 942; Hubner v Tucker 245 F.2d 35; First National Bank of Mobile v US 160 F.2d 532.

International Tax Attorney, EA, US Tax Court Practitioner in the USA, Counsel of the High Court in South Africa, adjunct Professor of International Tax at Thomas Jefferson School of Law.

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