Masters Degrees (School of Accountancy)

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Browsing Masters Degrees (School of Accountancy) by Author "Burger, Frances"

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    Third party appointments in South African tax law : a comparison with South African civil procedure law and a constitutional review
    (Stellenbosch : Stellenbosch University, 2019-12) Burger, Frances; Van Heerden, Linda; Stellenbosch University. Faculty of Economic and Management Sciences. School of Accountancy.
    ENGLISH SUMMARY: Section 179 of the Tax Administration Act (TAA) gives the South African Revenue Service (SARS) the power to issue a notice to any person who holds or owes, or will hold or owe any money for or to a taxpayer. That person is then required, in terms of the notice, to pay the money to the SARS in satisfaction of the taxpayer’s outstanding tax debt. This is known as a third party appointment. Third party appointments can be made without the supervision of a court of law (referred to as a judicial oversight in this research). The main problem identified in this research was whether third party appointments are constitutional due to the lack of judicial oversight. This was investigated by conducting a comparative study. Third party appointments, a fiscal debt collection measure, were compared and evaluated against emoluments attachment orders (EAOs), a civil debt collection procedure. EAOs are contained in section 65J of the Magistrates’ Court Act (MCA) and allow for the attachment of the judgment debtor’s emoluments held by an employer of the judgment debtor to satisfy an outstanding judgment debt. The Constitutional Court, in the case of University of Stellenbosch Legal Aid Clinic and Others v Minister of Justice and Correctional Services and Others, found that EAOs in terms of section 65J(2) of the MCA were invalid and unconstitutional to the extent that it failed to guarantee judicial oversight when each EAO is issued. A non-empirical study was conducted by reviewing legislation, case law and existing academic writing that relate to the collection of debt owed by debtors from third parties in South African tax and civil procedure law. The principles established in the aforementioned case law, together with the conclusions drawn from the comparative study, was applied to determine whether section 179 of the TAA is constitutional and consistent with section 34 of the Constitution, providing taxpayers the right to have access to courts. It was shown that third party appointments and EAOs, though not identical, were similar in nature. Both allow for the attachment of money held by third parties owing to the taxpayer or judgment debtor, respectively, to satisfy outstanding debt. It was shown that the Constitutional Court in the University of Stellenbosch Legal Aid Clinic-case confirmed that the attachment of property should always be subject to judicial oversight, and that the attachment of emoluments also amounted to the attachment of property. The Constitutional Court found that, to the extent that the attachment of property to satisfy a judgment debt is not subject to judicial oversight, it is invalid and unconstitutional. In light hereof, it is questionable whether third party appointments are still valid and constitutional, as it also allows for the attachment of property to satisfy an outstanding tax debt, without judicial oversight. It was found that there should be no reason why the findings of Constitutional Court in the University of Stellenbosch Legal Aid Clinic-case should not equally apply to third party appointments. It is suggested that should third party appointments reach the attention of our courts, it may be found that third party appointments are no longer constitutional due to the lack of judicial oversight.