What happens when tax law allows one person the final say? A new study investigates how discretionary powers granted to the Commissioner of the South African Revenue Service (SARS) under the Value-Added Tax (VAT) Act affect both taxpayers and the principle of fairness in tax administration.
A study led by Sizakele Zamokuhle Ngwenya, a North-West University (NWU) graduate, has turned the spotlight on the often-overlooked discretionary powers held by the SARS Commissioner under the Value-Added Tax Act. These powers, while previously examined under the Income Tax Act, have received limited attention within the VAT framework, despite their implications for tax policy and taxpayer rights.
“The discretionary authority of the Commissioner under the VAT Act has not been subjected to the same level of analysis as under the Income Tax Act,” said Sizakele. “This leaves a gap in our understanding of how these powers are applied and what that means for principles like fairness and administrative justice.”
The research focused on whether the Commissioner’s powers align with the principles of a good tax system, originally articulated by economist Adam Smith. These principles, particularly fairness, are now reflected in the South African Constitution and the Promotion of Administrative Justice Act (PAJA).
“The Constitution and PAJA were designed to protect citizens from arbitrary decisions,” Sizakele explained. “That includes how tax laws are interpreted and enforced. Our concern is whether these discretionary powers uphold or undermine those protections.”
The study draws from international guidelines, including those of the Organisation for Economic Co-operation and Development (OECD), to assess how South Africa’s approach compares globally. Sizakele noted that discretionary powers in tax law must be exercised with transparency and accountability.
“Taxpayers need certainty,” Sizakele said. “When discretion is involved, there is a risk of inconsistency or unequal treatment. That is why this analysis is important – not just for legal scholars, but for every taxpayer.”
Sizakele’s study aims to inform both legal reform and public debate, contributing to the evolving understanding of how tax administration interacts with constitutional principles and the legal frameworks intended to uphold them.
Sizakele Zamokuhle’s research examines how SARS applies discretionary powers in VAT law and their alignment with tax fairness principles.
