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Treasury seeks to regulate tax advisers

12 July 2012   (0 Comments)
Posted by: SAIT Technical
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By Amanda Visser (Business Day)

THE Treasury has proposed that "recognised controlling bodies” for tax practitioners be established, which would pave the way for these professionals to be regulated under the Tax Administration Act.

This proposal followed from the discussions over the past few months sparked by Finance Minister Pravin Gordhan's comments about the tax compliance of some registered tax practitioners.

Stiaan Klue, CEO of the Institute of Tax Practitioners, said yesterday the regulatory model proposed in the amendments was one of the best in the world, and would go a long way to eliminate the "bad apples” in the industry.

Mr Gordhan referred to the noncompliance of some tax practitioners in his February budget speech, saying some of the 34000 tax advisers owed more than R260m in tax and had 18000 income tax returns outstanding in their personal capacities.

Noncompliant tax practitioners had also been singled out as a focus area in the South African Revenue Service's (SARS's) strategic plan for the next five years. Mr Klue said the strategic plan revealed that tax practitioners who were not registered with a professional body had worse compliance levels than those who were registered.

The average debt per case for a nonregistered tax practitioner was four times higher than for those who were registered.

The proposed amendments — published last Friday for public comment — provide for the recognition of particular controlling bodies such as the Independent Regulatory Board for Auditors, the South African Legal Practice Council (to replace the law societies) and a statutory body that the minister is satisfied is similar to these bodies, such as the Financial Services Board.

Mr Klue said there had been a major policy shift from the initial plan in 2007, which had been to establish an independent regulatory body for tax practitioners.

"A fully fledged statutory regulator would have created a double layer and hence created a major financial burden on tax practitioners and also duplication of the role of professional bodies,” Mr Klue said.

According to the proposed amendments, the commissioner of SARS may also recognise a controlling body if that body maintains relevant and effective minimum qualification and experience requirements, codes of ethics and conduct, and a disciplinary code and procedures.

It must have at least 1000 members when applying for recognition or a "reasonable prospect” of having 1000 members within a year of applying.

Mr Klue said SARS was devising an accreditation, or preferred status scheme, that would acknowledge low-risk tax practitioners.


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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