A taxpayer bears the onus of proof that an amount is not taxable or is deductible.

This requirement is contained in fiscal legislation. In various tax cases the court held that disposing of the onus is difficult and formidable as it starts with a presumption in favour of the fiscus. Recently the court seems to have adopted a more balanced approach. In a recent judgement handed down by the High Court of Appeal (Pretoria East Motors (Pty) Ltd v The Commissioner for SARS) the court held that SARS cannot raise assessments on unconfirmed facts or generalisations and then expect the taxpayer to prove that the basis of the assessment is wrong. The court held that an assessment must be based on specific identified transactions. The onus of proof must then be disposed off by the taxpayer based on the specific transactions under question. In a subsequent judgement handed down in December 2014 (Case Number 13132) the court applied the Pretoria East principle. It essentially judged that SARS must put the taxpayer in a position to dispose of the onus of proof. As SARS did not do so, the judgement on that issue went against SARS. In future, where SARS applies the “when in doubt, tax” principle and requires taxpayers to prove otherwise, taxpayers will have the Pretoria East remedy to require from SARS to indicate which transactions they are assessing and the reason for the assessments. This makes the playing fiends much more level.