MEMBERSHIP ANNOUNCEMENT:

REVISED TAX ETHICS STANDARDS

A.  Introduction

Given the changing political and professional landscape, SAIT has undertaken a wholesale review of its general professional ethics and its tax designated ethics standards.  While SAIT’s current standards are in line with the standards of our fellow local professional bodies, we believe that our membership requires a set of ethics standards specifically dedicated to daily tax practice.  We also believe that our tax ethics standards must be more closely in line with the ethical codes of other pre-eminent tax institutes located around the world.

Pursuant to these aims, we attach a draft version of SAIT’s newly proposed general professional ethics standards as well as SAIT’s proposed ethical standards specifically dedicated to tax practice.  Both sets are based on the existing ethical standards developed by the UK Chartered Institute of Taxation.

As indicated, this is still in draft form.  We have also left open a few areas in red for further discussion before we plan to finalise.  We believe that we must engage with you as members before we impose a whole new set of final rules.  We believe in a consensus approach, especially if the tax practitioner community is going to willingly accept a new status quo in their daily practice.

Click here to view the draft.  

We would accordingly request that you submit your comments below. For more in depth comments kindly email the leader of SAIT’s disciplinary team, Adrian Modikwe (disciplinary@thesait.org.za), so we can incorporate your views.  Comments are due by 21 February 2022. 

B.  Proposed ethical webinar series

We are also embarking on a series of ethics webinars.  Our goal is to facilitate specified areas of the new ethic codes so views are fully vetted, especially where the terrain is likely to be more sensitive.

1. General professional ethics (1^st session - July):   This session covers the proposed “Professional Rules and Practice Guidelines” that would be required of any legal, accounting or similar professional providing services to external parties for a fee.  These rules and guidelines include practice governance, new client engagements, objectivity and required document retention. Two key areas for discussion are the legitimacy of contingent fees (a major concern for SARS) and the role of professional advertising.

    

2. Tax compliance preparation (2^nd session - August):   The core of compliance lies in the preparation and initial submission of returns.   Tax return preparation and submission entails its own set of ethics in terms of practitioner obligations when representing the client taxpayer as balanced against the obligation to act truthfully within the scope of the law. Key issues of concern are the role of the tax practitioner in the critical review of information provided by the taxpayer and the exact nature of tax practitioner representation of facts when submitting documents to SARS.

    

3. Tax advisory (3^rd session - September):   Taxpayers often seek to advise to ensure that taxes to be paid do not exceed amounts actually due, and they may often seek advice to structure their affairs so as to legally minimize tax.  The question is how far this representation can go so as not to cross the line into evasion, overly wishful thinking or comparable avoidance.  Preplanned tax schemes to be resold regardless of taxpayer circumstance are also of concern.

    

4. Remedying tax return errors (4^th session - October):   Given that practical realities are often less than ideal, tax returns are often submitted with unwitting errors.  These errors may result in underpayments or overpayments.  These errors may be caused by wrongful application of the law but are more often caused by the lack of document control, weak internal systems and errors in communication.  Remedying these errors requires its own set of ethics. Taxpayers need to be encouraged to come forward to remedy their tax affairs. On the other hand, taxpayers will only come forward if doing so can be achieved while minimising adverse the collateral impact (e.g. penalties).Taxpayers will be very reluctant to come forward if the price to be paid places the viability of their businesses in jeopardy.

    

5. Tax controversy management (5^th session - November):   A different set of issues arise once various tax returns are submitted.  SARS is entitled to ask questions and request information to ensure the veracity of what has been submitted.  Tax practitioners need to protect confidentiality while complying with the law.  It is this balance and the obligation to reasonably defend the taxpayer’s interests in the midst of a tax dispute that forms the basis of this session.

    

6. Practitioner’s personal tax obligations (6^th session - December):   One aspect of being a model tax practitioner is satisfying one’s own tax obligations.  One cannot advise when one does not have his or her own tax affairs in order. In short, tax practitioners must lead by example.  Moreover, in South Africa, the Tax Administration Act specifically provides SARS with the direct authority to terminate the “registered” status of a tax practitioner if that practitioner fails to remain compliant in terms of his/her own tax affairs (see section 240(3) and (4) of the Tax Administration Act, Act No. 28 of 2011).

In addition to the above, we plan to have one or two additional special sessions within the timelines above for Professional Indemnity Insurance and In-house Directors and their In-house Staff.  This session may go beyond an hour depending on the presenters. 

In-house tax representatives and tax-dedicated employee :  Tax ethics is not just a subject for tax practitioners that provide services to third parties.  Tax-dedicated employees (including tax representatives) also have obligations to properly submit tax returns / information on behalf of their employers as well as to limit their tax advice to representation that falls within the boundaries of the tax law.  The purpose of this session is to focus on both tax ethics as well as tax practice management for in-house tax employees.

C. Proposed SAIT ethics committee

As part of our engagements with the UK Chartered Institute of Taxation, it was suggested that we form a separate committee solely to focus on tax ethics on a recurring basis.  We hereby call for applications for seven (7) experts from diverse professional backgrounds to advise on all future changes to our ethics standards, deliver expertise in ethics training/CPD and to review our disciplinary process.  More specifically, our goal is to obtain specialists from the following fields:

• Ethics and Practice Management;
• Legal (Tax and General);
• Risk Management Advisory;
• Tax Return Preparation, Submission and Compliance;
• Tax Advisory;
• Tax Dispute / Controversy Management; and
• In-house Risk Management.

Please submit your expression of interest along with your resume to the leader of SAIT’s disciplinary team, Adrian Modikwe (disciplinary@thesait.org.za), so we can obtain your participation.

Thank you for your attention.

Kind regards,

Adrian Modikwe

SAIT Legal and Compliance Officer