Constitutionality of taxpayer secrecy provisions

The Constitutional Court[1] yesterday confirmed the unconstitutionality of certain provisions of the Promotion of Access to Information Act and Tax Administration Act. The Court rejected the concept of absolute taxpayer secrecy and confirmed the existence of a narrow public interest override.

Parliament now has 24 months to cure these deficiencies.

The Court ordered, inter alia, the following:

"The order of constitutional invalidity of the High Court of sections 35 and 46 of the Promotion of Access to Information Act 2 of 2000 (PAIA), to the extent that they preclude access to tax records by a person other than the taxpayer (a requester), even in circumstances where the requirements set out in section 46 of PAIA are met, is confirmed.

The order of constitutional invalidity of the High Court of sections 67 and 69 of the Tax Administration Act 28 of 2011 (TAA) to the extent that they—

(a) ?????????preclude access to information being granted to a requester in respect of tax records in circumstances where the requirements set out in section 46 of PAIA are met; and

(b) ????????preclude a requester from further disseminating information obtained as a result of a PAIA request, is confirmed.

PAIA is to be read as follows:

“46 Mandatory disclosure in the public interest.—Despite any other provision of this Chapter, the information officer of a public body must grant a request for access to a record of the body contemplated in section 34(1), 35(1), 36(1), 37(1)(a) or (b), 38(a) or (b), 39(1)(a) or (b), 40, 41(1)(a) or (b), 42(1) or (3), 43(1) or (2), 44(1) or (2) or 45, if—

(a) ????????the disclosure of the record would reveal evidence of—

(i) a substantial contravention of, or failure to comply with, the law; or

(ii) an imminent and serious public safety or environmental risk; and

(b) ????????the public interest in the disclosure of the record clearly outweighs the harm contemplated in the provision in question.”

The TAA is to be read as follows:

• ????????subsection (1) of section 69 of the TAA is to be read so as not to prohibit disclosure of taxpayer information by former or current SARS officials where access has been granted for the disclosure of the information in terms of PAIA; and

?

• ????????subsection (4) of section 67 of the TAA is to be read to provide that a person who receives information under sections 68, 69, 70 or 71, must preserve the secrecy of the information and may only disclose the information to another person if the disclosure is necessary to perform the functions specified in those sections unless the information has been received in terms of PAIA.

The Court, therefore, held that the request of the third applicant (Thompson), under PAIA, for access to the individual tax returns of Jacob Zuma for the 2010 to 2018 tax years is referred to SARS for consideration afresh in the light of the Court's order (and the third applicant is afforded one month to supplement such request).

[1] Arena Holdings (Pty) Ltd t/a Financial Mail and Others v SARS and Others [2023] ZACC 13