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Gordhan’s figures on dodgy tax practitioners challenged

Wednesday, 29 February 2012   (0 Comments)
Posted by: SAIT Technical
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Gordhan’s figures on dodgy tax practitioners challenged

Business Day - AMANDA VISSER

FINANCE Minister Pravin Gordhan’s attack last week on tax practitioners created the impression that all of them were noncompliant, but the statistics that were revealed could be distorted, says Stiaan Klue, CEO of the South African Institute of Tax Practitioners (SAIT).

Mr Gordhan said practitioners owed more than R260m and had more than 18000 income tax returns outstanding in their personal capacity. Mr Klue said yesterday the South African Revenue Service (SARS) recently raised the fact that accounting firms’ messengers were registering as tax practitioners.
"Although not allowed by SARS, legally this can happen and hence create distorted statistics regarding tax practitioners,” Mr Klue said.

Various professional bodies have been consulting SARS to address noncompliance among tax practitioners. The Income Tax Act provides SARS the opportunity to report a tax practitioner to his professional association. To date, SARS has not done so.

Mr Klue said it was unfortunate that all practitioners were now tarred with the same brush. Of the 34000 registered practitioners, 4800 were registered with SAIT. Others belonged to the South African Institute for Chartered Accountants (Saica) and the South African Institute of Professional Accountants (Saipa). About 10000 tax practitioners did not belong to any regulatory body.

"The general remark by the minister is not conducive to the OECD (Organisation for Economic Co-operation and Development)-recommended enhanced relationship approach. It is very important that the three parties, being SARS, practitioners and taxpayers, work together to improve tax compliance,” Mr Klue said.

The OECD investigated the role of tax advisers and their role in tax avoidance. In 2008, it created the concept of an enhanced relationship to address one characterised by conflict, mistrust, anger and undermining of the relationship.

The level of complication in the South African tax system makes it difficult for taxpayers to act ethically without assistance. Calculating the correct payments for provisional tax requires assistance.
Tomorrow is the deadline for the second payment that needs to reflect 80% of the estimated income of individual taxpayers.

Any person who receives income other than remuneration is a provisional taxpayer. This includes rental income from a property, interest income or income from carrying on any trade.



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.

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