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Bill would let SARS clamp down on reckless tax practitioners

15 August 2012   (0 Comments)
Posted by: SAIT Technical
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By Amanda Visser (Business Day)

PROPOSALS in the Tax Administration Amendment Bill published last month will give the South African Revenue Service (SARS) more power and authority to protect taxpayers against reckless, negligent and incompetent tax practitioners, Stiaan Klue, CEO of the South African Institute of Tax Practitioners, says.

The proposed amendments would allow SARS to force practitioners to register with a "recognised controlling body”, whereas now many were registered only with SARS, tax practitioners said.

The amendment bill also contains several additional grounds on which a senior official can lodge a complaint against a tax practitioner. These include lodging a complaint when a registered tax practitioner has, "without exercising due diligence”, prepared or assisted with any return, affidavit or other document relating to the act.

The additional grounds for complaint were not seen as "draconian”, a tax practitioner, who asked not to be named, said on Friday. It certainly gave SARS more authority with regard to the control and regulation of the profession.

"They have more weight to throw around,” the practitioner said.

However, Mr Klue warned that the term "due diligence” was not actually defined in the act, and would expose many tax practitioners, especially those not trained as auditors, to penalties.

Tax practitioners have always been seen as acting as agents for the taxpayer, with the final responsibility actually resting with the taxpayer. "There had been cases in the past where tax practitioners acted recklessly, trying to get the maximum refund for a client, and when the client received an audit, the tax practitioner vanished,” Mr Klue said.

The proposed amendments will force tax practitioners to apply their minds, for example, by ensuring that expenses claimed were legitimate and not inflated, and that the invoices supplied were legal.

The proposed amendments state that the commissioner of SARS must recognise the following entities as controlling bodies: the Independent Regulatory Board of Auditors, the South African Legal Practice Council, and any other statutory body that the minister is satisfied is similar to these bodies.

A senior official may lodge a complaint with a controlling body when there is an unreasonable delay in the finalisation of matters before SARS; when the practitioner has been grossly negligent with regard to any work they have performed; and when they have directly or indirectly attempted to influence anyone employed by SARS.

SARS spokesman Adrian Lackay said SARS had the power to report professionals to their controlling bodies under the auspices of the Tax Administration Act.

"The proposal that all tax practitioners fall under a recognised controlling body, which adheres to minimum standards, is the first phase of the regulation of tax practitioners to address these issues,” Mr Lackay said.


WHY REGISTER WITH SAIT?

Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

MINIMUM REQUIREMENTS TO REGISTER

The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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