ConCourt rules on Sars matter

AGREEMENT: INTEREST IS PART OF DISCLOSURE

- Amanda Visser

Taxpayers who conclude a voluntary disclosure agreement (VDA) under the voluntary disclosure programme (VDP) cannot ask the South African Revenue Service (Sars) to remit the interest after signing the agreement.

The Constitutional Court (ConCourt) said it would lead to a "glaring absurdity" to permit a taxpayer to conclude a VDA, which makes provision for interest and then allow the taxpayer to subsequently ask for it to be waived.

"This destabilises the VDP framework. Finality of VDAs will be up in the air," the court found in the appeal brought by Sars against a decision by the Supreme Court of Appeal (SCA) in the matter between Sars and Medtronic.