Well-structured LML4804 PORTFOLIO (ANSWERS) Semester 2 2024 - DISTINCTION GUARANTEED. (DETAILED ANSWERS - DISTINCTION GUARANTEED!)..... QUESTION 1 (TAX ADMINISTRATION AND TAX AVOIDANCE) The Tax Administration Act 28 of 2011 (TAA) empowers the Commissioner for the South African Revenue Service (the ...
LML4804
PORTFOLIO Semester 2 2024
Unique Number:
Due Date: 25 October 2024
QUESTION 1
In addressing the Vintage Club's inquiry regarding the notice from SARS demanding
information about its members, we must assess the legal framework that governs SARS’
actions. The Tax Administration Act 28 of 2011 (TAA) provides SARS with the authority to
request relevant material for the purpose of tax administration, which includes audits and
investigations, especially in cases where there is a potential for tax non-compliance.
SARS' Authority to Request Information
Section 46 of the TAA empowers SARS to request relevant material from taxpayers or third
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QUESTION 1
In addressing the Vintage Club's inquiry regarding the notice from SARS demanding
information about its members, we must assess the legal framework that governs
SARS’ actions. The Tax Administration Act 28 of 2011 (TAA) provides SARS with
the authority to request relevant material for the purpose of tax administration, which
includes audits and investigations, especially in cases where there is a potential for
tax non-compliance.
SARS' Authority to Request Information
Section 46 of the TAA empowers SARS to request relevant material from taxpayers
or third parties if such material is necessary for the administration of a tax act. The
term "relevant material" is broadly defined and includes any information, document,
or item that SARS considers necessary to determine a taxpayer’s compliance with
the tax laws. Importantly, SARS must request this material with reasonable
specificity. This means that the notice should clearly outline the nature of the
information requested and the reasons behind the request. In this case, SARS is
seeking the names and personal details of the club’s members, likely to cross-check
their lifestyles and wealth levels against their tax returns.
Privacy Considerations and Legal Requirements
While SARS does have broad powers to collect information, the Vintage Club must
also consider the right to privacy of its members. The Protection of Personal
Information Act 4 of 2013 (POPIA) applies in this context. POPIA sets out
requirements for the lawful processing of personal information, ensuring that the
processing is done in a way that respects the privacy rights of individuals. However,
SARS is generally exempt from POPIA’s requirements when conducting audits, as
SARS’ duties are performed in the interest of public finance, which supersedes
individual privacy in tax-related matters. Nonetheless, SARS must still act within the
bounds of the law and cannot conduct arbitrary investigations without justifiable
cause.
Specifics of the Notice and Relevant Grounds
The Vintage Club should verify that SARS’ notice complies with the requirements of
the TAA. Firstly, the notice must have been issued by a senior SARS official, and it
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