The constitutionality of search and seizure operations conducted before and after Tax Administration Act 28 of 2011

Abstract

This contribution is an analysis of certain provisions of the Tax Administration Act 28 of 2011 (TAA). The TAA is aimed at consolidating all the provisions on tax administration, such as the provisions on search and seizure operations which are administered by the South African Revenue Service, which were in various tax Acts such as the Income Tax Act 58 of 1962, the Value Added Tax Act 89 of 1991, the Transfer Duty Act 40 of 1949 and the Estate Duty Act 45 of 1955. This dissertation examines whether the promulgation of the TAA harmonized the potentially unconstitutional search and seizure provisions that existed prior to the TAA. This research critically analyses the rights of taxpayers in terms of the 1996 Constitution of The Republic of South Africa against the powers awarded to SARS in terms of the TAA. This dissertation is aimed at establishing whether the promulgation of the TAA protects the taxpayers' constitutional rights to privacy. Particular reference is made to the powers the Commissioner has in relation to search and seizure with or without a warrant. This research also includes a comparative analysis with the United States, and analyses how this country deals with search and seizure under U.S. income tax law. Specific reference in this regard is made to searches without a warrant. In this comparative analysis it is discovered that in the U.S, the Internal Revenue Service (IRS) is given the powers to conduct search and seizure if a tax crime has been committed and the challenge is finding a balance between the powers given to the IRS and the rights as entrenched in 4th Amendment of the U.S. Constitution. This research concludes with a finding that the TAA does not adequately protect taxpayers' rights and the powers conferred to SARS officials place taxpayers in a vulnerable position. In conclusion it is suggested that the recently established Tax Ombudsman must be vigilant in ensuring that the powers given to SARS by the TAA are not abused at the cost of the taxpayers.