SECRECY

The issue of confidential taxpayer information has recently gained some notoriety. The topic attracted some of the media spotlight during Day 4 of the Public Protector’s Impeachment Inquiry, when a well- known former member of the ‘SARS Rogue Unit’, Johan van Loggerenberg, fielded heated questions regarding alleged disclosures of this type of information.

However, many viewers of the Parliamentary Proceedings may have wondered what exactly their taxpayer information is, when, and to whom, SARS may disclose this information.

Section 67(1)(b) of the Tax Administration Act 28 of 2011 provides that taxpayer information “[...] means any information provided by a taxpayer or obtained by SARS in respect of the taxpayer, including biometric information.” This definition clearly creates a very wide ambit. In a recent High Court judgment, it was said that “most if not all information that relates to a taxpayer and a taxpayer’s affairs is taxpayer information”. As was confirmed in the Public Protector v Commissioner for the South African Revenue Service and Others [2020] ZACC 28, the status of taxpayer information is nothing short of sacrosanct.

There are, however, exceptions albeit that the ambit of disclosure is very narrow. Whilst Section 69(1) of the Tax Administration Act provides that SARS officials “must preserve the secrecy of taxpayer information and may not disclose taxpayer information to a person who is not a SARS official”, subsection 2 allows for disclosure of taxpayer information to certain persons and in certain circumstances to the extent necessary for SARS officials to execute their duties. The ‘net of confidentiality’ is, however, tightened once again by Section 67(4) which provides that the recipient of that information is equally bound by law not to make further disclosure.

Practically, SARS will be seen to have breached the secrecy provisions if, for example, they issue a Letter of Audit Findings, but this contains the information of another taxpayer, or if they direct correspondence relating to disputes or any other tax-related issue to the incorrect taxpayer thereby disclosing the confidential information of another taxpayer. The disclosure of taxpayer information, outside of the scope provided for by the exceptions, is sanctioned as a criminal offense in terms of Section 236 of the TAA.

The issue of whether taxpayer information, which has been disclosed by SARS during public High Court judicial review proceedings, falls under the protection of Section 69(1) is currently the subject of ongoing litigation.

Intellectual property disclaimer:
The contents of any article published by Pieterse Sellner Erasmus should not be construed as professional legal advice.