The Supreme Court of Appeal judgment against Absa in its legal battle against the South African Revenue Service is one in a series of losses for taxpayers in recent months.
The Absa dispute arose when Sars issued an anti-avoidance notice in 2018, stating that Absa and its subsidiary, United Towers, were “party to an impermissible tax avoidance scheme” and derived a tax benefit from it. “Absa has now been sent all the way back down to the bottom of the snakes and ladder board to start fighting their case afresh,” says Choate.From a fiscal policy perspective, it is necessary to put the burden of proof on the taxpayer to show that their tax position was correct. However, that is a harsh burden to put on taxpayers when it can take, on average, three years to have your case heard.
The rationale of the SCA is to ensure that disputes about tax assessments in the ordinary course are ventilated through the tax court. But that should not prevent a person, even with this new line of reasoning, from approaching the high court directly for a review.Ignorance about the tax dispute process is certainly not bliss