The Draft Tax Administration Amendment Bill provides for the establishment of "recognised controlling bodies". The Bill requires that all persons that give tax advice or complete tax returns register with such a body. The controlling body will have to ensure that its members comply with a relevant tax code of conduct and continuing professional development. In addition, tax practitioners who do not act diligently when practicing before SARS, or who acts with gross incompetence, will be subjected to a disciplinary process consisting of retired judges appointed by the Minister of Finance.
The objective is for all tax practitioners to belong to a recognised tax practitioners' association or fall under the authority of a directly relevant statutory regulator, such as the Independent Regulatory Board for Auditors (IRBA).
The inclusion of the IRBA as a controlling body for tax practitioners is interesting.
Parliament has delegated certain functions to the IRBA via the Auditing Professions Act 2005 (APA). The Auditing Professions Act, 2005 (APA) limits the powers of the IRBA to the regulation of auditors. Thus the IRBA issues auditing standards, enforces a code of conduct for auditors and keep a register of auditors. The original raison d'etre of the APA was to protect the public interest by regulating registered auditors only. Parliament in 2005 accepted this position based on extensive research and consultation by Dr. Len Konar and as a result of the Nel Commission of Inquiry into the Affairs of the Masterbond Group and Investor Protection in South Africa.
It is still a hotly debated point whether auditors should be allowed to perform non-audit work for audit clients. Providing the IRBA with an additional function to regulate their member's tax work will surely add to this debate.
How will the ability of the IRBA to regulate auditors be affected if they were to be appointed one of the controlling bodies for auditor tax practitioners? Will the APA have to be amended to allow the IRBA to develop tax standards for auditors?
In the case of registered auditors - do they give tax advice or complete tax returns as registered auditors or as tax practitioners? Will they be required to register with IRBA as tax practitioners? Will the APA be amended to allow tax practitioners to register with IRBA as non-auditors?
SAIT has been a home for tax practitioners since 2007. Our members include a wide array of professionals - persons qualified as auditors, lawyers, financial planners, accountants and others all find the value proposition offered by SAIT compelling.
The main reason for this is that SAIT has a specific tax focus. The Institute is the only professional body with a code of conduct specifically drafted to address tax work and issued SA Taxation Standards. In addition, when the low compliance levels of tax practitioners were first reported in 2009, SAIT introduced the submission of a tax clearance certificate as a requirement for annual membership renewal. In 2012, SAIT is still the only professional body that has this as a requirement and a precondition for membership. We provide a weekly tax focussed newsletter, a bi-monthly magazine and our Taxation Disciplinary Board is chaired by a judge of the high court.
We take tax seriously and believe that tax is a public interest issue and believe that tax advice should not be clouded by a lack of independence on the side of the practitioner or by a lack of focus by a controlling body.
I suggest that by having SAIT as the Independent Board that oversees or regulate members tax work in consultation with other bodies such as the IRBA would be the best rather than over or extra assigning the IRBA.
Very interesting article, and you raise some important points for discussion. One of those important points is contained in your last paragraph. Should tax practitioners really consider themselves independent? Is there not a strong case for the position that, no matter how friendly a face Sars holds out to the public, no matter how fair Sars may claim to be, there will always exist a state of conflict between the Receiver and the Taxpayer. Given that, should tax practitioners really claim, or even try to be, independent?
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.