New tax ombud has heaps of experience in tax law

Yanga Mputa, South Africa’s first female tax ombud, has been in the hot seat for less than two weeks, but she is no stranger to tax policy or the implementation and administration thereof.

She honed her skills at the South African Revenue Service (Sars), in the private sector as a tax consultant, and at National Treasury.

Mputa is an admitted attorney of the high court and became chief director of legal tax design at National Treasury in 2014. She also sharpened her legal teeth at the large business unit of Sars, assisting with audits and implementing complex international tax legislation.

Her predecessor, Judge Bernard Ngoepe, had been at the helm of the Office of the Tax Ombud (OTO) since its establishment in 2013. His second term came to an end last year.

Read: Term of Tax Ombud comes to an end after nearly a decade

Mputa feels humbled by her appointment and sees it as a step up. She does not see her new role as being on the “other side”. It is important to test whether tax policy can be implemented, she says.

She believes her experience and expertise will benefit taxpayers, and that as one of the few tax ombuds in Africa – and a female one at that – she will be able to play a meaningful role.

The balance

She believes it is important that the principles of good tax policy are adhered to when drafting legislation.

“It must be fair, simple, transparent and administratively easy to comply with.” It is important to strike a balance between the rights of taxpayers and the ability of the tax authority to collect taxes.

“Even though I am coming from the tax policy side, I understand what is required to have an effective tax administration. If it is difficult to collect tax, it is not good policy.

“At the tax ombud, we want to see a balance between taxpayer rights and the ability to collect tax,” she tells Moneyweb.

Ngoepe was a driving force in ensuring greater independence from Sars so that taxpayers can trust in its ability to resolve their complaints. Despite several legislative changes over the years, the office is still not structurally independent from Sars, which it is mandated to oversee. This deeply bothered Ngoepe.

Mputa also believes in the importance of being structurally and operationally independent from Sars. “Independence is the cornerstone on which we build to achieve success and credibility. Hence, the need for the office to be impartial.”

She adds that although the OTO advocates for taxpayer rights, it has to balance these with tax compliance.

She believes the framework within which the OTO was created works well, but she does acknowledge that improvements can and must be made to be able to have a seamless operation.

Read:
Increasing importance of a tax ombud for SA taxpayers [Aug 2022]
Delayed payment of Vat refunds continues to frustrate taxpayers [Sept 2022]

When asked about improvements that can be made, she notes the importance of having a good working relationship with Sars. “When we make our recommendation, Sars has to implement it,” she says, adding that if Sars were not implement a recommendation there would be no fairness to the taxpayer.

Legislation on par

Mputa considers South African tax legislation on par with that of international best practice and tax legislation in developed countries. She has been at the forefront of South Africa’s legislative processes.

She gained first-hand experience in the adoption of global standards for the exchange of tax and financial information between tax jurisdictions. She was involved in peer reviews of countries like the UK to ensure that their adoption of the standards was on par.

She was South Africa’s representative on the OECD/G20 steering group of the inclusive framework on base erosion and profit shifting. The work done by the steering group has paved the way for the biggest changes in global tax legislation.

Mputa notes that much of the work done by the OECD and the inclusive framework countries is already reflected in our legislation.

Read:
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Although there is criticism about the complexity of tax legislation, many of the complexities relate to the tax affairs of multinational companies – and multinationals are in the position to appoint the best tax minds to help them navigate this landscape.

A good tax system

When prompted about the frustration ordinary South Africans have about the squandering of their hard-earned tax money, she refers to a statement made by Deputy Finance Minister David Masondo during a Tax Indaba in 2019.

He referred to three elements of an effective tax system, namely a good tax administration, good politicians and good tax policy.

When asked to score South Africa in terms of these three elements, she said: “We are improving … Sars is achieving its revenue targets.”

Mputa says if the country can collect its taxes, and has good tax policies, then the politicians must be effective since parliament passes the legislation.

She describes her management style as inclusive and consultative. “At the same time, I am not scared to apply my own discretion when making decisions.”

The new tax ombud is committed to an open-door policy. She was well-known for her approach to active stakeholder engagements during her tenure at National Treasury.

“It is important to accept criticism in order to improve matters. My time at Treasury has taught me that the criticism is not aimed at the person but at what is coming out of the office.”

Read:
One-sided tax laws violate taxpayer rights to fair administration [April 2022]
Tax Ombud holding Sars to account for actions of questionable legality [Dec 202]