By Nelson M. Tsabedze, Lead Consultant, NMT Consulting (Pty) Ltd (Part 1)
Today is a historic day in as far as taxation is concerned in the country. This is because the Revenue Appeals Tribunal Eswatini (RATE) has today officially commenced operations where it will start addressing tax appeal cases. The extent to which the RATE will be beneficial to aggrieved taxpayers shall not only be determined by the Tax Laws of the land, but also by the powers the Tribunal has and the taxpayers’ understanding of the workings of the Tribunal. This piece, therefore, seeks to articulate and share insights with the taxpayers about the workings of the Tribunal.
The Tribunal
A Tribunal is a special court consisting of a panel of persons officially appointed by the government to look into a problem of a particular kind outside the hierarchy of the regular court system. The Eswatini Revenue Tribunal was established through the Revenue Appeals Tribunal Act 13 of 2019 (Hereinafter “the RATE Act”), with the objective of addressing appeals made by taxpayers against the Commissioner General (CG) of Eswatini Revenue Services (Hereinafter “ERS”).
The RATE’s core functions entail hearing and determining appeals under; Customs & Excise Act, Value Added Tax, Income Tax Order, and appeals under any revenue law. Section 6(1) of the RATE Act provides that the Tribunal shall have the jurisdiction to hear and determine an appeal arising from an assessment, decisions, ruling, determination, and direction of the Commissioner General under any revenue law.
Section 8 of the RATE Act gives the Tribunal powers similar to that of a court of law. These include the power to take evidence on oath, summon a person to give evidence, inspect the credibility of any presented document or recording, and also the power to subpoena someone in possession of any evidence (documentary, electronic or otherwise), which may be of assistance to the Tribunal when discharging its duties.
In deciding an appeal before it, section 17(5)(a) gives the Tribunal powers and authority to either; confirm, reduce, increase or vary any assessment, ruling, or determination made by the CG. Where in the view of the Tribunal there is room for reconsideration by the CG, Section 17(5) (b) of the RATE Act empowers the Tribunal to order a matter to be remitted or returned to the CG for reconsideration in accordance with directions of the Tribunal.
Composition of the Tribunal
The Tribunal consists of a seven-member panel which is appointed by the Minister of Finance to preside over the appeals. As per the provisions of section 3 sub-section 3 of the RATE Act, the tribunal is led by a president and supported by 6 other panel members who hail from diverse fields, namely; two legal practitioners, two accounts, and two members from the business community.
The diversity of the membership seeks to ensure that all interest groups in the determination of revenue grievances are catered for to ensure due consideration is given to varying perspectives. In terms of Regulation 6(1) of the Revenue Appeals Regulations of 2022, a panel constituted for any appeal hearing shall consist of three-panel members and at least one of them must be a legal practitioner.
Taking into account the magnitude, seriousness, complexity, or any other consideration which may be deemed appropriate, the President may decide that an appeal be heard by a full tribunal, as empowered by Regulation 6(3). In essence, where an appeal is heard by a full tribunal, it means it would be heard by all 7 members and the president shall preside over the proceedings.
Appeals Procedure
When to appeal?
Section 15(1) of the RATE Act provides that, any person who is aggrieved by a decision, assessment, ruling, determination, or directive of the Commissioner General may appeal to the Tribunal. It must be noted that the reference to person includes a company, business, and an individual natural person.
Before expanding further on the appeal process, it is imperative to understand what is meant by a ‘decision’ in this context. You will recall that as a taxpayer, you are under a legal obligation to file returns, declare income and make payments where applicable.
Once that filing is completed, the Commissioner General of ERS then processes the information which has been filed by the taxpayer, thus arriving at a decision. Therefore, a decision by the CG could be, an assessment, a directive, a ruling, or a determination. You will further recall that the Income Tax Order and the Value Added Tax, among others, give the Commissioner General Audit powers.
This means, once the CG has concluded an audit and re-issued an assessment that amounts to a decision of the CG which a taxpayer may appeal if aggrieved.
(There is nothing contained in the Act that suggests that the Tribunal has the jurisdiction to preside over a grievance emanating from the administrative or procedural aspects of the audit process. The tribunal’s jurisdiction is focused on the decision of the Commissioner General).
How to appeal?
The appeals procedure is laid out in Regulation 10 of the Revenue Appeals Tribunal of 2022. Regulation 11(c) provides that an appeal to the Tribunal shall be filed within 30 days of receipt of a decision by the CG.
The filing of an appeal shall be made by way of a notice of appeal, which shall contain among other things; the type of tax in dispute, the decision of the CG being appealed, grounds of appeal, and a statement of facts essentially outlining what happened. Prior to submitting the notice of appeal at the Tribunal, the appellant must have served the CG with the copy of the notice of appeal within 21days from the date of the decision of the commissioner general as provided by Regulation 10(1) (b).
Upon receipt of the notice of Appeal, the CG shall have 30 days from receipt of notice of appeal to reply to the grounds of appeal. Among other aspects, the CG’s reply has to contain reasons for the decision, and reasons for disputing the matters contained in the appeal. The CG’s reply must be served to the appellant and the Tribunal.
Where there is a failure to meet the provided timelines for serving the notice of appeal or the reply, the Regulations make allowance for either of the parties to make an application for an extension of time for filing. In the case of the appellant, the extension of time for filing can be granted in terms of Regulation 10(4), where the appellant proves that they were absent from Eswatini, that they were sick, or for any other reasonable cause which may have prevented the appellant from filing the notice of appeal or submitting documents within the specified period.
In order to be granted an extension of time for filing, Regulation 11(3) provides that the CG must prove that the delay is inordinate or other reasonable cause may have prevented the commissioner general from submitting the statement facts or documents within the specified period.
In light of the foregoing, you are surely asking yourself what will happen to the matters which have been ripe for appeal before the operationalization of the Tribunal, which automatically falls outside the timelines provided in the Regulations? In terms of the letter of the law, it means that a decision by the CG made in January 2021 for instance, is now outside the allowable appeal period of 21 and 30 days.
Well, we are of the understanding that authorities have identified and addressed this gap by way of a Memorandum of Understanding between the Eswatini Revenue Services and the Revenue Appeals Tribunal. It is believed that the effect of this MOU is that, taxpayers will be allowed to appeal decisions of the Commissioner General at the Tribunal without the CG raising objections relating to the expiry of timelines for filing. The specifics of the said MOU in terms of the extent of the scope, period, and enforceability thereof, are not yet in the public domain.
(Our next article will unpack the proceedings of the Tribunal, covering aspects such as representation, leading of evidence, and the decisions of the Tribunal. The next piece will also look into further processes where either the Taxpayer or Commissioner General is not satisfied with the decision of the Tribunal)
The Author is a Legal & Tax Practitioner who holds an LLB Degree from Wits University and is an Admitted Attorney of the High Court of Eswatini. He is also the founder of NMT Consulting, a multi-discipline Management Consultancy situated at Ezulwini, in the Hhohho region