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Tax practitioners are being told to ‘toe the line’

Or face being deregistered and barred from practicing.

The South African Revenue Service (Sars) has been taking steps to “align” tax practitioners with the law that regulates those who advise or assist taxpayers with their tax matters.

Sars Commissioner Edward Kieswetter confirmed this week that it has started with the deregistration of non-compliant tax practitioners.

“We have come across tax practitioners and tax preparers who often aid and abet taxpayers to either overstate expenses or under-declare income,” he said on the sidelines of a media briefing on Tuesday.

Read: Concern about non-compliant tax practitioners

Once a tax practitioner has been deregistered they will no longer be allowed to give advice or submit returns on behalf of taxpayers. If it is a sole practitioner this may require the taxpayer to take their tax matters to a new practitioner.

Industry bodies such as the South African Institute of Tax Professionals (Sait) and the South African Institute of Chartered Accountants (Saica) confirmed that their members have been receiving letters from Sars about non-compliance.

Beatrie Gouws, head of stakeholder management and strategic development at Sait, says Sars has been pursuing tax practitioners whose own returns are not up to date or who have unpaid debts with Sars.

Tax practitioners have also been receiving letters from Sars on the way they are handling taxpayer files or because they are missing “procedural commitments” such as deadlines.

Saica tax suite project director Somaya Khaki says Sars has given non-compliant practitioners a specific timeframe to remedy complaints or to prove to Sars that they are in fact compliant.

From administrative to criminal non-compliance

The non-compliance can range from criminal conduct to non-submission of tax returns over multiple tax types, as well as non-compliance with the bylaws or codes of conduct of the recognised controlling bodies (RCBs).

The regulatory framework for tax practitioners was introduced in 2013 to ensure that practitioners are properly qualified when they give advice – either in terms of educational qualifications or years of experience.

“If someone is registered [with an RCB and Sars] one would assume that they have the required experience and qualifications,” says Khaki.

The section of the Tax Administration Act relating to the deregistration of tax practitioners for non-compliance is relatively new.

If a practitioner has been found tax non-compliant in the last 12 months for an aggregate period of at least six months, they will first receive a letter from Sars requesting them to either prove that they are compliant or to remedy the non-compliance within 21 days of that letter.

However, if they do not prove compliance or the non-compliance is not remedied within the specified time period, they will be deregistered as a tax practitioner and may not practice as such from the date of deregistration – and, effectively, for a further period of six months after having become compliant.

“If a tax practitioner has offered proof that they are compliant, and Sars rejects the evidence, the practitioner can approach their controlling body and request intervention,” says Khaki.

There are currently nine controlling bodies recognised by Sars. In addition, the Tax Administration Act also automatically recognises the Law Society of South Africa, the General Council of the Bar of South Africa, Bar Councils and Societies of Advocates as well as the Independent Regulatory Board for Auditors (Irba) as controlling bodies.

According to Gouws all the RCBs maintain the minimum qualifications and experience requirements of their members as well as the continuing professional education requirements, tax compliance and disciplinary process and procedures.

She says if a practitioner is registered in terms of the Act it is reasonable to expect that they will act as an interface with Sars, and also manage the taxpayer’s tax and procedural risk – ensuring that the taxpayer follows the correct procedures and discloses the necessary information based on the appropriate tax positions.

Taxpayers must be wary of tax practitioners who want to use their profile to submit their return. Practitioners have profiles linked to their clients with Sars. In instances where there has been misconduct, Sars and the RCB can hold the practitioner accountable for their actions.

Read: 10 questions to ask your tax practitioner

However, the ultimate responsibility for their tax affairs remains with the taxpayer, regardless of whether someone else prepares it on their behalf, says Khaki.

“Sars will come after you as the taxpayer.”

People need to take that seriously and not just abdicate all the responsibility to the tax practitioner, warns Khaki.

Kieswetter says Sars is “clear” that taxpayers will be held accountable for their own declarations, but to the extent that tax practitioners are complicit there is legal recourse against them.

Khaki says if the practitioner was negligent or offered bad advice, taxpayers can complain to the RCB or to Sars and there will be investigations. There will be consequences if there is evidence of negligence.

If however the individual ends up with a tax liability because of an incorrect disclosure, they still need to answer to that. The action against the practitioner is a separate process.

Gouws warns that taxpayers who use non-registered practitioners open themselves up to tax, reputational and financial risks.

“It makes them vulnerable to costly administrative and procedural mistakes, even if the tax position they have adopted is correct. They are also vulnerable to false promises and fly-by-nights because the individual is not being held accountable by a RCB.”

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We cheat on our taxes because we are over taxed.
And our tax money is wasted and stolen.
Can Mr.Kieswetter blame us if we cheat on our taxes?

His 1st statement in this regards is wrong since the TP can only declare which is declared to him, the client still has the responsibility, not the TP.
Statements like this cause a lot of trouble, this week had a client who believed he did not have to submit returns, with a nasty penalty of R14500.

I hope by “we” you mean SA citizens in general, otherwise admitting to tax fraud on a public forum with what might be your real name and surname, might just be the dumbest thing I have read on the internet today.

Indeed. Unfortunately I can’t cheat on my tax returns.
I have no money to cheat with!

So it turned out to just be big braai talk after all.

To be fair, you would cheat on them anyway.

Please speak for yourself.

Here we go …”Anything” trolling again !

yeah because bragging about cheating tax is perfectly okay right. Please make a point rather than just being upset.

Do you have Anything worthwhile to say?

@Chris…you hit the nail on the head

But, actually, the sentiment is a lot worse than this

I can guarantee you that the tax dissenters on this forum are still a civilized bunch, mainly white older well educated chino wearing professionals who never go beyond writing a few angry words on an internet forum [ lump me there too if you wish ]

However, the reality is, we are only witnessing the tip of the iceberg here

Below all this is the real seething rage, frustration and utter growing hatred for these corrupt, thuggish govt entities…and its growing by the day….the lower middle class and unwashed masses, cracking under the unbearable pressure of just trying to survive and keep their homes and families alive……a writhing million numbered army waiting for a spark

All the while, Nero is playing his fiddle

Eddy, Dont you think that your masters , the ANC crime syndicate, should toe the line before you even open your snout?

Aah, so because someone else is behaving badly, this guy should stop doing his job and let the practitioners do there job until everyone else is perfect. Am sure you would moan about that too.

I know moaning is fun, but rather think before opening your snot.

As usual, “Anything” pops up to deride everyone and anyone dare commenting here [ what a terrible name – ‘Anything’ because he stands for ‘Nothing’ ]

“Anything”, has it not possibly crossed your infantile mind that the reason people are commenting here is because SARS has completely and totally FAILED in their duty to be objective and fair !!

So, when you have politicians, tenderprenuers, and govt back slappers profiting to the tune of illegal BILLIONS all the while the man in the street, ie, thats US, is continually burdened with increasingly unjust taxes !!??

How utterly embarrassing for you to be so out of touch, and for all to see on a public platform

What have other people and their crimes got to do with this man’s mandate? Is he in charge of them?

Child like thinking. Do you excuse the guy who is going to rob your house because there are other corrupt people in the world?

You will moan about people doing their job and people not doing their job in the same sentence. This is why you lot are not taken seriously anymore.

@Anything…..seriously..as has been expressed a few times by other MW readers already, your verging on nothing more than trolling is evident by your illogical short sighted comments

“What have other people and their crimes got to do with this man’s mandate? Is he in charge of them?”

Its got EVERYTHING to do with this man, and the despicable organization he represents !!

If you honestly don’t possess the cognitive ability to recognize the sheer arrogance of the head of SARS when he simultaneously threatens SA over burdened and struggling public for tax irregularities, but then his organization at the same time is guilty of:

CORRUPTION……INEFFICIENCY…turning a BLIND EYE to the BILLIONS ferried away by the likes of GUPTA and plenty of ‘cadres’ and the ‘connected’…….implication in ROGUE UNITS………….BULLYING…….INCOMPETENCE on a grand scale……when previous SARS bosses themselves even have all personally had charges laid against them..!!….THEFT………..SPYING…….NEPOTISM………when SARS turns a blind eye to politicians fleecing MILLIONs [ we looking at you Malema and many like him ], but will heavily penalize the hard working man on the street because God forbid he’s late on his tax return !……ABUSE of the court systems……..etc etc…..and the list goes on !!

Well then, you have a major problem on your hands, and yes, thats EXACTLY why everyone is unhappy and moaning about the untenable status quo

We didn’t think having to SPELL it out for you was necessary, but welcome back to reality ‘Anything’ [ unless of course you actually shilling on behalf of SARS, in which case there is no hope at this point ]

@Anything wrote:

“She did not say that at all. She is supporting tax practitioners been held to a certain standard”

Oh..really …standards ?…are you fully cognisant of the irony here !?

Ok, so you expect the SA public, and TP’s, to operate to a certain ‘standard’, when that very ‘standard’ is totally and utterly DEVOID in the very thuggish entity we are expected to hand our hard earned money over to !!??

No ..what is lacking here, is a BASIC understanding of fundamental principles which you are failing to grasp:

How can anyone expect taxpayers to behave, when SARS themselves have less ethical values than the Mafia ?????

So, in other words, taking the fact that most people working in SA today are BARELY making ends meet, are fully aware that when pension comes around the corner govt will NOT be looking after them, …..have NO savings to fall back on, ……..are just about making ends meet despite working to exhaustion as everyone works harder to try keep up while tax and living cost keep increasing, only to be met with further rising costs and taxes, so one has to work harder again to keep up again, all which results in a never ending vicious cycle …………never mind we are paying tax for services which should already be PROVIDED in return, such as safety/health/education etc but which the taxpayer has to FUND themselves !??? !

Then, to taunt us even more, besides taxes which are already supposed to fund infrastructure, govt goes ahead and introduces yet MORE tax via E-tolls, the ultimate slap in the face !!

Then there’s VAT……capital gains taxes…sugar tax…emissions tax…duties [ just another form of TAX ]…taxes for when you ALIVE…you even taxed when you DIE [ estate tax ]

Tell us Mr La La Land, how do you think all this is working out for the country ????

If only the corrupt ANC government is held to the same standard. If not Mr. Kieswetter, your words are just faint background noise.

SARS should start on their own employees first and conduct an urgent skills audit. Agreed Tax practitioners should be qualified enough to give advice, complete returns and have their own house in order.
The same level(as with Tax Practitioners) of qualification, competence as well as continuing education credits(CPD)should alo be applied to SARS employees who deal with tax matters.

There are some dodgy practitioners – I’ve seen one aid and abet a client who seemed to me to be involved in illegal operations.
Support Kieswatter all the way in this!

@LouiseBCook…..Mmm….tell us, does the name Gupta ring a bell ???

So, are you honestly admitting that:

The elite, those in govt, and the rest who have their snouts in the gravy train, …..who have now robbed, pillaged and looted SA to the tune of TRILLIONS of Rands, and continue to plunder at will …… all the while the man on the street, never mind just struggling to SURVIVE is now continually being burdened with increasingly crippling taxes,…..but….. this is all A-OK ?????

And, you SUPPORT this ?

You have got to be kidding us !

Wow, maybe as they say, its a world gone mad, and the perversion will only get worse

She did not say that at all. She is supporting tax practitioners been held to a certain standard. It takes a special kind of mentality to assume that this means that she supports other crime and over taxation. You know you can have one without the other right?

You will moan about people doing their job and not doing their job in the same sentence. This is why your bleating is not listened to anymore.

As a practitioner, I fully agree. It has become increasingly difficult to operate as a professional as there are too many practitioners assisting taxpayers to execute illegal but profitable actions. However, I also believe that this warning must extend to those in SARS that have been assisting these practitioners over the years. And maybe SARS will be prepared to establish a communication channel where crooked SARS officials can be reported. The current channel only results in the practitioner being literally hit over the head

Here is one thing that would scare people straight : taxpayer balance sheets (all the significant ones must provide this), should be stated at market value not tax base cost, with severe penalties for false disclosure. It may also give some interesting perspective on unrealised potential CGT

@Johan_Buys…..wrote:

“taxpayer balance sheets (all the significant ones must provide this)”

????

What do you mean by this ? [ as SARS already has a tally of your assets !! ]

And who exactly qualifies as a ‘significant one’ ??

“should be stated at market value not tax base cost,”

Market value…oh right …that moving target that’s impossible to define ????…and depends on who’s doing the ‘valuing’

And who exactly is going to determine ‘market value’…govt….??…SARS officials maybe ???…..just like they will with land expropriation….haha – good luck with that Johan

So doomed to failure when one contemplates all the potential for abuse by those in power

RealityBites:

The balance sheet taxpayers submit are at tax cost.

All provisional taxpayers submit a balance sheet. At tax cost.

The market value of listed shares at 28 February are not arbitrary, they are absolute.

The IFRS value of shares in companies that in turn own listed shares, aircraft, farms, private shares are why we pay auditors as much as we do.

I would venture that the balance sheet people present to SARS is quite different from what they present to banks when applying for loans and what they talk about around a braai…

@Johan….you didnt read my post properly

Firstly, you only concentrating on ‘shares’ as an asset, which forms a small component of what falls under the tax overall umbrella

We are talking tax overall

When it comes to tax purposes, there are so many other asset classes that can be taxed its boggling [anything from property to art to many other kinds of derivatives in the financial world too, add to the mix crypto currencies, paper trading etc, which then could also fall under different types of tax like CGT etc ]

Hence, that ‘balance sheet’ can be a moving target and the underlying values of the assets difficult to define [ of course, I am talking about the wealthier with many diff asset classes across the board, and then even spread all over the world, making valuations even more complicated as then currency fluctuations etc come into play as well …however, any normal local salaried employee would be easier to define ]

Also, its getting more and more complicated and worse, as governments get more desperate, they increase more and more taxes…….leading to even more and more omissions/errors/avoidance etc by taxpayers, all resulting in a messy race to the bottom for everyone

All the more reason to penalise delinquent SARS staff.

Fine a couple of them for rogue performance and watch the practitioners become more co-operative.

Sadly, Kieswetter’s bullying and blustering seems just More Of The Same.

@v_3…agreed !

There seems to be a total disconnect with some here, who don’t understand the basic old wise saying of:

A fish rots from the head

How on earth can SARS, and even tax practitioners, expect us to ‘behave’ when these govt thugs are on the rampage !!??

Are you kidding us ????

No…the reality is….till that gets sorted, expect tax evasion, or even a total middle finger to SARS and govt from ALL SA workers as things get worse

You read it here first

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