The application and constitutionality of the so called “reverse” onus of proof provisions and presumptions in the Income Tax Act: the revenue’s unfair advantage

G.K. Goldswain

doi:10.1108/10222529200900012

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Meditari Accountancy Research

ISSN: 2049-372X

Online from: 2000

Subject Area: Accounting and Finance

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The application and constitutionality of the so called “reverse” onus of proof provisions and presumptions in the Income Tax Act: the revenue’s unfair advantage

Document Information:
Title:	The application and constitutionality of the so called “reverse” onus of proof provisions and presumptions in the Income Tax Act: the revenue’s unfair advantage
Author(s):	G.K. Goldswain, (Department of Taxation, University of South Africa)
Citation:	G.K. Goldswain, (2009) "The application and constitutionality of the so called “reverse” onus of proof provisions and presumptions in the Income Tax Act: the revenue’s unfair advantage", Meditari Accountancy Research, Vol. 17 Iss: 2, pp.61 - 83
Keywords:	Additional tax, Burden of proof, Constitution, Deeming provisions, Onus of proof, Penalties, Presumptions, Reverse onus
Article type:	General review
DOI:	10.1108/10222529200900012 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Abstract:	This study analyses and discusses the application and constitutionality of the general onus of proof provision (section 82 of the Income Tax Act 58 of 1962 [the “Act”]), the presumption in favour of the State when criminal sanctions are applied to an offending taxpayer (section 104(2) of the Act) and the mechanics for imposing administrative sanctions in terms of section 76(1)(b) of the Act. The conclusion reached is that the reverse onus presumption, as provided for in terms of section 104(2) of the Act, is unconstitutional. It is penal in nature and offends against the constitutional right of an accused to a fair trial (sections 35(3) of the Constitution of the Republic of South Africa Act, 108 of 1996 [the “Constitution”]). The section 36 limitation of rights clause of the Constitution does not save it. Section 76(1)(b) of the Act read in conjunction with the deeming provision of section 76(5) of the Act, is inextricably linked to the section 82 general reverse onus provision of the Act. Hence, when these three sections are applied together, they create a reverse onus that, prima facie, violates the right to just administrative action (section 33 of the Constitution). Regarding the general reverse onus burden as provided for in terms of section 82 of the Act, the conclusion reached is that it is reasonable and justifiable in an open and democratic society and can therefore be regarded as constitutional.