How efficient and compliant is your tax practitioner and how well are you protected?
The last deadline for the 2012 filing season for provisional taxpayers filing their tax returns via e-filing was
31 January. Failing this, an administrative penalty for late submission of R250 is being levied for each month that the individual is late in submitting a tax return. Additionally, failure to pay the assessed tax by January 31 will trigger backdated interest.
It is reported that approximately
17 000 tax practitioners, roughly half of tax practitioners registered with South African Revenue Service (SARS), do not hold any formal qualification in taxation. Tax practitioners came under attack in the 2012 Budget Speech when Minister of Finance, Pravin Gordhan, announced that tax practitioners owed over R260 million to the state, and accounted for more than
18 000 outstanding income returns in their personal capacity. “If that is their attitude to their own tax compliance, one shudders to think what advice they are giving to their clients,” Gordhan stated.
Stiaan Klue, chief executive of the South African Institute of Tax Practitioners (SAIT), ascribes the serious state of affairs to the enormous amount of tax changes promulgated in the past decade.
“In recent years tax legislation has become very complex and the non-compliance highlighted by the minister can be directly linked to the practitioners’ technical ability to perform the work, albeit exposing taxpayers to significant SARS penalties,” says Klue.
“It is evident that the primary aim of government with the regulation is to reform the tax profession to protect taxpayers against tax practitioners who practice without the required diligence, and in extreme circumstances practice recklessly to the ultimate detriment of the ordinary taxpayer,” Klue adds.
In order to measure the 17 000 tax practitioners before the 1 July deadline, the SAIT has developed a tax competency assessment, along similar lines to the US Inland Revenue Service (IRS) compulsory competency assessment for tax return preparers. The first national assessment was held on 15 February, with monthly tests scheduled thereafter.
The tax profession was recognised by South Africa Qualifications Authority (SAQA) in November 2012 when the tax designations were registered. This resulted in the tax profession joining the list of South African professional designations whose statutory and non-statutory professional bodies have to comply with criteria set out by SAQA.
The regulation of the financial services industry saw similar legislation when the Financial Advisory and Intermediary Services Act (FAIS) was introduced in 2002, which sought to ensure that South Africa’s 140 000 financial advisers met competence requirements in order to protect consumers and professionalise the financial services industry.
“Looking at SARS’ Strategic Plan 2012-2017, non-registered practitioners owe SARS on average four times more tax than their registered counterparts,” comments Klue, who believes that the new regulatory regime, together with the occupational qualification in tax, will address the issue of training and certification of tax practitioners. As a recognised professional controlling body, the SAIT now has their own Taxation Disciplinary
Board which can take action against their tax practitioners
if they commit fraud or act