,UNIVERSITY EXAMINATIONS CONFIDENTIAL
May/June 2025
TAX3704
TAX ADMINISTRATION
100 Marks
(2 Hours)
EXAMINERS:
First Examiner: Prof MJ Nieuwoudt
Second Examiner: Adv WR Uys
This paper consists of six (6) pages.
Instructions:
(i) Before you start the exam, Scan the Exam QR code or use the Exam Access Code
(ii) This is an open-book exam. You can access your study material, but you may not copy verbatim
from it. You must provide your answers in your own words. Copying your study material verbatim
is regarded as cheating or plagiarism and no marks will be allocated.
(iii) This exam is proctored
Information relating to the exam question paper:
1. This paper consists of two (2) questions.
2. Start each question on a new (separate) page.
3. Number each page and upload ONE PDF document.
, TAX3704
Date: 22 May 2025
INSTRUCTIONS ON THE DAY OF ASSESSMENT:
Ensure you are connected to the internet in order to log into the Invigilator
App and scan this QR code.
If you encounter difficulty in scanning the QR code, you can
alternatively enter the Exam Access Code below the QR code to start the
invigilation.
If you finish your assessment before the app timer has run out you need to
press the ‘Finish Assessment’ button and follow instructions before you
exit or minimise the app.
Scan the QR code at the start time of the assessment, unless otherwise
specified by your institution, note that you can only scan this QR code once.
The QR code is only scannable for a limited time and it should
therefore be scanned as soon as possible after the assessment
commencement time.
Keep the Invigilator App open on your smartphone for the full duration of
the assessment. You are not allowed to minimise or leave the app during your assessment.
You must adhere to the assessment time limit communicated to you by your institution. The timer displayed in the Invigilator
may vary depending on the start time of invigilation.
FURTHER GUIDANCE
If you only have one device you may access your assessment in the application by pressing the ‘Access Browser’ button in
the top right corner of your app.
Once the QR code is scanned, ensure your media volume is turned up and place your smartphone next to you.
The Invigilator App will notify you with a notification beep when you are required to action a photo request, which you
should then perform as soon as possible.
We recommend that you keep your smartphone on charge for the duration of the assessment.
Ensure you are connected to the internet when commencing invigilation. You also need to be connected to the internet at
the end of the assessment in order to upload the app data.
If your assessment has multiple online sections, tests or attempts, you should NOT finish the invigilation until your entire
assessment has been completed.
Should you encounter any technical difficulty, please WhatsApp The Invigilator Helpdesk on +27
QUESTION 1 (60 marks)
You are a registered tax practitioner. Your sister, Margaret, has come to you in distress. She does not understand why
she and her husband (Charles) suddenly have tax issues with the South African Revenue Service (‘SARS’). You
agreed to assist Margaret and Charles with their tax matters but not in your professional capacity as a tax practitioner.
, PART A: Information about Charles’s tax position (30 marks)
Charles is a shareholder of Bargain Cars (Pty) Ltd, which buys and sells second-hand cars. He has a 70% shareholding
in the company, and the remaining 30% shares is owned by his best friend, Bill. You always suspected that Bill is
not the most honest person you know, and it was no surprise when SARS commenced with a lifestyle audit of Bill.
While investigating Bill, all his businesses and any companies he is a shareholder of are under investigation
(including Bargain Cars (Pty) Ltd).
A reputable audit firm audits Bargain Cars (Pty) Ltd and the company receives a clean report each year. The company
is registered for VAT, Income Tax, PAYE, and other related taxes.
You decided to discuss certain relevant issues (with reference to legislation) with Charles
Issue 1: Selection for a SARS audit
Issue 2: Audit of Bargain Cars (Pty) Ltd by SARS
Issue 3: Additional assessments issued by SARS and dispute resolution Issue 4: Payment of tax
pending an objection or appeal
REQUIRED MARKS
Issue 1 (a) Explain to Charles how SARS selects a taxpayer for audit purposes
and, in the company’s case, what triggered the audit. 4
(b) List the facts that count in favour of Bargain Cars (Pty) Ltd for the
purposes of an audit performed by SARS. 3
Issue 2 Identify the process that SARS must follow before the audit may begin,
during the audit and when the audit is finalised. 10
Issue 3 Discuss a plan of action with Charles if he wants to dispute the
additional assessment that SARS may issue. 10
Issue 4 Explain to Charles whether Bargain Cars (Pty) Ltd must pay the tax due
on the additional assessment if the company plans to dispute the 3
additional assessment (pending objection and appeal).
TOTAL 30
QUESTION 1 – PART A: CHARLES’S TAX POSITION (30 Marks)
Issue 1(a): Selection for a SARS Audit
(4 marks)
The South African Revenue Service (SARS) selects taxpayers for audit in
terms of section 40 of the Tax Administration Act 28 of 2011 (TAA). This
May/June 2025
TAX3704
TAX ADMINISTRATION
100 Marks
(2 Hours)
EXAMINERS:
First Examiner: Prof MJ Nieuwoudt
Second Examiner: Adv WR Uys
This paper consists of six (6) pages.
Instructions:
(i) Before you start the exam, Scan the Exam QR code or use the Exam Access Code
(ii) This is an open-book exam. You can access your study material, but you may not copy verbatim
from it. You must provide your answers in your own words. Copying your study material verbatim
is regarded as cheating or plagiarism and no marks will be allocated.
(iii) This exam is proctored
Information relating to the exam question paper:
1. This paper consists of two (2) questions.
2. Start each question on a new (separate) page.
3. Number each page and upload ONE PDF document.
, TAX3704
Date: 22 May 2025
INSTRUCTIONS ON THE DAY OF ASSESSMENT:
Ensure you are connected to the internet in order to log into the Invigilator
App and scan this QR code.
If you encounter difficulty in scanning the QR code, you can
alternatively enter the Exam Access Code below the QR code to start the
invigilation.
If you finish your assessment before the app timer has run out you need to
press the ‘Finish Assessment’ button and follow instructions before you
exit or minimise the app.
Scan the QR code at the start time of the assessment, unless otherwise
specified by your institution, note that you can only scan this QR code once.
The QR code is only scannable for a limited time and it should
therefore be scanned as soon as possible after the assessment
commencement time.
Keep the Invigilator App open on your smartphone for the full duration of
the assessment. You are not allowed to minimise or leave the app during your assessment.
You must adhere to the assessment time limit communicated to you by your institution. The timer displayed in the Invigilator
may vary depending on the start time of invigilation.
FURTHER GUIDANCE
If you only have one device you may access your assessment in the application by pressing the ‘Access Browser’ button in
the top right corner of your app.
Once the QR code is scanned, ensure your media volume is turned up and place your smartphone next to you.
The Invigilator App will notify you with a notification beep when you are required to action a photo request, which you
should then perform as soon as possible.
We recommend that you keep your smartphone on charge for the duration of the assessment.
Ensure you are connected to the internet when commencing invigilation. You also need to be connected to the internet at
the end of the assessment in order to upload the app data.
If your assessment has multiple online sections, tests or attempts, you should NOT finish the invigilation until your entire
assessment has been completed.
Should you encounter any technical difficulty, please WhatsApp The Invigilator Helpdesk on +27
QUESTION 1 (60 marks)
You are a registered tax practitioner. Your sister, Margaret, has come to you in distress. She does not understand why
she and her husband (Charles) suddenly have tax issues with the South African Revenue Service (‘SARS’). You
agreed to assist Margaret and Charles with their tax matters but not in your professional capacity as a tax practitioner.
, PART A: Information about Charles’s tax position (30 marks)
Charles is a shareholder of Bargain Cars (Pty) Ltd, which buys and sells second-hand cars. He has a 70% shareholding
in the company, and the remaining 30% shares is owned by his best friend, Bill. You always suspected that Bill is
not the most honest person you know, and it was no surprise when SARS commenced with a lifestyle audit of Bill.
While investigating Bill, all his businesses and any companies he is a shareholder of are under investigation
(including Bargain Cars (Pty) Ltd).
A reputable audit firm audits Bargain Cars (Pty) Ltd and the company receives a clean report each year. The company
is registered for VAT, Income Tax, PAYE, and other related taxes.
You decided to discuss certain relevant issues (with reference to legislation) with Charles
Issue 1: Selection for a SARS audit
Issue 2: Audit of Bargain Cars (Pty) Ltd by SARS
Issue 3: Additional assessments issued by SARS and dispute resolution Issue 4: Payment of tax
pending an objection or appeal
REQUIRED MARKS
Issue 1 (a) Explain to Charles how SARS selects a taxpayer for audit purposes
and, in the company’s case, what triggered the audit. 4
(b) List the facts that count in favour of Bargain Cars (Pty) Ltd for the
purposes of an audit performed by SARS. 3
Issue 2 Identify the process that SARS must follow before the audit may begin,
during the audit and when the audit is finalised. 10
Issue 3 Discuss a plan of action with Charles if he wants to dispute the
additional assessment that SARS may issue. 10
Issue 4 Explain to Charles whether Bargain Cars (Pty) Ltd must pay the tax due
on the additional assessment if the company plans to dispute the 3
additional assessment (pending objection and appeal).
TOTAL 30
QUESTION 1 – PART A: CHARLES’S TAX POSITION (30 Marks)
Issue 1(a): Selection for a SARS Audit
(4 marks)
The South African Revenue Service (SARS) selects taxpayers for audit in
terms of section 40 of the Tax Administration Act 28 of 2011 (TAA). This
