The massive new Tax Administration Bill 2011, which is likely to be promulgated as the Tax Administration Act 2011 later this year, contains some explosive provisions that will affect taxpayers and tax practitioners alike, as well as certain shareholders, directors and trustees amongst others. One of them is found in what will be s 237 of the Act.
It provides that a person who submits a return or other document to sars under a forged signature, uses an electronic or digital signature of another person in an electronic communication to sars, or otherwise submits to sars a communication on behalf of another person without the person’s consent and authority, is guilty of an offence and, upon conviction, is subject to a fine or to imprisonment for a period not exceeding two years.
One of the effects of this provision is to make it a criminal offence for a tax practitioner to communicate with sars on behalf of a taxpayer without the taxpayer’s consent and authority. Tax practitioners should therefore ensure that they obtain a written mandate from their clients before communicating with sars on their behalf. Otherwise they could end up in jail for up to two years or face a fine. Unlike murder and corruption, acting without a client’s express authority will be a serious offence in South Africa.
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.