The Draft Rules under section 103 of the Tax Administration Act, No. 28 of 2011, were published on 22 March 2013 and are now available for comment.

The Draft Rules could lead to interesting grounds for dispute if finalised in their current form. Particularly perturbing is the fact that the Draft Rules fail to provide for the South African Revenue Services (SARS) to issue a statement of grounds of assessment (currently issued at resolution of a hearing at the Tax Board).

A taxpayer, on the other hand, is still expected to submit a statement of grounds of appeal to SARS to begin proceedings at the Tax Court. This is followed by SARS' statement of grounds opposing appeal and then the taxpayer's reply. The reason for no longer requiring SARS to provide a statement of grounds for assessment in the Rules is unclear and results in a gap in the dispute process as it is unknown in response to what the taxpayer is expected to issue a statement of grounds of appeal.

This essentially gives SARS an advantage in that it can tailor its response to taxpayer's submissions without disclosing its case upfront.