SARS will tell the Constitutional Court that it lacks the resources and capacity to inspect all goods containers entering the country, with the tax agency able to inspect only about 2% of imports and forced to rely on the goodwill of taxpayers.

A Business Day report says this is as it battles Richards Bay Coal Terminal (RBCT) in a dispute over the implementation of the Custom and Excise Act, in a matter that will be heard by the apex court in August.

According to the SARS affidavit, SARS lacks the manpower to inspect all cargo entering the country. It said considering imports alone, more than R2trn in goods passed through SA’s ports in the 2019 financial year.

‘This is obviously a critically important source of revenue collection’ for the fiscus that is ‘essential for the financial wellbeing of the country and in the interest of all its inhabitants’.

It added: ‘SARS does not have the resources or capacity to examine all goods that enter or come through the country. Indeed, the (Act) never anticipated that SARS would have that type of capacity. Currently, about only 2% of all containers that enter into SA are inspected.’

These arguments by SARS were part of the reasons it disagreed with the SCA finding that tariff determinations are reviewable.

The dispute between the entity and SARS is over the audit conducted by the tax agency for the diesel rebates claimed for about 2012 that were rejected after SARS said the entity had claimed ‘non-qualifying activity’ under the diesel rebate scheme.

One of the decisions of the SCA that SARS is appealing, is that it must hand over to RBCT a record giving rise to impugned decisions.

SARS said if the SCA judgment that tariff determinations and value determinations is allowed to stand, it would be a burden on its workforce.

Full Business Day report