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The caterpillar to butterfly effect

04 September 2017   (0 Comments)
Posted by: Author: Tracy Johnson
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Author: Tracy Johnson, (tracy.johnson@uct.ac.za)

How to bridge the skills gap between tax student and tax professional in the smoothest possible way.

In tax consulting firms, there is constant pressure to produce high quality deliverables that meet clients’ budget and deadline requirements. The tax manager or partner will look to a junior tax consultant to assist with these deliverables, with the hope that they will find a competent young tax professional in that consultant who can prepare a carefully considered, technically correct deliverable that requires few corrections on review. But, in my experience in practice, it often takes many months of “on-the-job” training for consultants who join a practice straight from university to acquire many of the skills a young tax professional typically needs. This can be a frustrating time for the tax managers or partners who are under pressure to deliver, but still need to find time to train the new consultants. It can also be a disheartening time for the new consultants who may have performed well in their university accounting degree, but begin to lose confidence in themselves when they realise how much more they still need to learn to become proficient tax professionals.

The problem is essentially a skills gap. Accounting students gain tax technical knowledge at university, but they also need the skills to do their jobs effectively. And, developing skills takes time and practice. So, why not start developing the required skills at university level? This is essentially the aim of the Tax Honours programme that I have developed at the University of Cape Town (UCT). Of course, “on-the-job” training will always be essential, but, in my view, equipping university students with the specific skills that they will need as young tax professionals smooths the transition from student to young tax professional and enables the new consultants to add greater value from their first day on the job. This can be rewarding for both the new employee and the employer.

But, what skills are required?

Professional writing skills

I have placed this skill at the top of this list quite purposefully. Whether the new consultant is replying to a client’s email, preparing a tax findings report, responding to queries from SARS, drafting a legal opinion or preparing a brief to senior counsel, good writing skills are necessary. Developing professional writing skills, before entering the workplace, can only be to the advantage of both the new employee and the employer. If one considers that, for example, most accounting students would not have had guidance or experience in drafting legal opinions, the preparation of these unfamiliar documents could seem rather daunting at first. But, by providing students with guidance and opportunities to practise professional and legal writing as part of their tertiary tax education, they can hone these skills before they even enter the workplace.

Tax research skills

These skills are easily overlooked, but their importance cannot be overstated. The tax issues that tax advisors are presented with are often complex. Indeed, if the answers to these issues were clear or obvious, it would be unlikely that the client would have sought the assistance of a paid tax professional in the first place.

In fact, in many cases, focused research is required to provide the client with a view that is supported or defensible in law. This is a time-consuming process. And, since junior consultants have a lower charge-out rate compared to their seniors, they are often tasked with performing the required research. As a result, equipping young tax professionals with an awareness of the various materials that should be considered and the know-how needed to conduct focused tax research would quickly make a new consultant a valuable asset to his or her employer. If tax students are given the tools, techniques and opportunities to practise their research skills while at university, employers will benefit from the increased quality of their research. An additional benefit for young tax professionals is that, since they would have an awareness of the relevant tax materials and how to find and use them, they would be able to continue their tax education independently long after they have left university.

Legal reading skills

There are a few separate, but related, skills that I have grouped together under this simple phrase. One of these is the level of comfort with which a young tax professional can read tax legislation. Ideally, new consultants should steer away from relying on textbooks as their primary source of tax knowledge and should instead feel comfortable and confident in considering the wording of the legislation itself when analysing the implications of a particular provision for a particular client’s interests.

A young tax professional should also have a grounding in the proper approach to fiscal legislative interpretations. A good consultant considers not only the language of the provision, but also the context in which it appears, the purpose thereof and the background as to why it was introduced or amended.

The ability to identify other sections that would be relevant to the client in conjunction with the provision in question is also advantageous. As is the ability to read tax cases and understand their effect on the application of legislative provisions.

Commencing the development of these skills, while the student is still at university, has obvious benefits for their early careers.

Knowledge application skills

Of course, technical knowledge is important, but it fades if not regularly used. So, what is more valuable in a tax advisory context is the ability to apply the technical knowledge to a client’s situation based on the specific set of facts. And, like all skills, this requires practice and, once again, giving tax students the opportunity to practise this skill, while still studying, can improve their performance early in their careers.

UCT’s approach with the Tax Honours programme

In my view, the honours year is the perfect period in which to focus on the development of the skills indicated above. The Tax Honours programme at UCT has been designed with the specific aim of bridging the skills gap between accounting student and young tax professionals.

The syllabus includes a variety of advanced tax topics that are selected on their relevance in practice. With these topics forming the subject matter, the students are given the guidance and the opportunity to apply and practise their writing, research, legal reading and knowledge application throughout the programme. For example, instead of traditional tests, students are provided with the background facts related to a fictional taxpayer’s tax issue and a deadline for their deliverable. Then, to complete the assignment, the students must use the tools and guidance provided in the lectures to analyse and apply the relevant provisions of the tax legislation, conduct further research to support their views and prepare the required response to the “client” in the form of an email, memorandum, opinion, and so on.

Of course, many new consultants may find that they are mainly involved in tax compliance work, initially. Therefore, the programme also provides students with the opportunity to consider the raw source documents and information provided by a fictional client, apply the tax legislation thereto, prepare the relevant tax computations and complete the relevant tax returns. This helps make the material “real” for the students. It also provides them with insight into the nature of the work that they are likely to perform at the start of their careers.

In my view, tax technical knowledge alone is insufficient to prepare tax students to be high performers early in their careers. They need to practise and develop the skills they will use as young tax professionals. The earlier they start developing these skills, the better, both for the young tax professionals themselves and for their future employers.

This article first appeared on the September/October 2017 edition on Tax Talk. 


 

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