SECURITIES TRANSFER TAX – REFUNDS

Where Securities Transfer Tax ("STT") has been overpaid, taxpayers are entitled to a refund of the amount overpaid.
Section 4(1) of the Securities Transfer Tax Administration Act, 2007 (the "STTA Act"), states that "[t]he Commissioner must refund the amount of any overpayment of tax or of any interest or penalty properly chargeable in respect of the transfer of any security, if application for the refund is made within two years after the date of that overpayment."
Although the wording of section 4(1) of the STTA Act makes it clear that the SARS has no discretion and is obliged to refund STT if the request for a refund is made within two years from the actual date of overpayment, this does not mean that SARS are prohibited from making a refund if the request for the refund is late. .
While section 4 91) expressly sets out what the Commissioner must do if the stated time period is complied with, it does not state what the Commissioner must do if the stated time period is not complied with. In our opinion, by implication the Commissioner has a discretion to make a refund even if it is submitted outside of the stated time period, presumably after representations have been made to him and he is of the view that he should make the refund.
There are no statutory guidelines in the Act as to how the discretion should be exercised. The Commissioner's decision must comply with the requirements for administrative justice which are contained in section 33 of the Constitution read with the Promotion of Administrative Justice Act, 2000 (Act No. 3 of 2000). In particular, the Commissioner's decision must be reasonable. For this purpose, the Commissioner is required to consider all relevant matters such as the

the reasons for the delay;
the length of the delay; and
any other relevant factor.