By: Lambert Roberts
With the 2024 Tax Filing Season upon us, South African taxpayers who want to do the right thing, face rising concern over non-compliant tax practitioners whose actions can spring nasty and costly surprises on unsuspecting taxpayers.
In official correspondence, the South African Revenue Service (Sars) warned South African taxpayers and tax practitioners that non-compliance is a thing of the past. This warning is timely issued, as many individuals and businesses are preparing their annual tax returns.
If you use a bad tax practitioner, Sars has placed you on notice for the risks you take. It states the importance of being fully compliant, because as a taxpayer, your tax affairs ultimately remain your own responsibility.
The issuing of Interpretation Note 132 on the 29th of July 2024 is very important for all tax practitioners, persons involved in tax, and even taxpayers themselves who are concerned about the consequences of using a non-compliant tax practitioner.
Sars Commissioner Edward Kieswetter has aptly framed the problem statement: if your tax practitioner’s own taxes are not compliant, how can the practitioner be competent to ensure your compliance and keep your tax affairs in order? Although the few bad apples do not define the value of a Tax Practitioner, this strong signal by SARS should be warmly welcomed.
Taxpayer pain
We see in daily practice the serious consequences of taxpayers who got things wrong in the mistaken belief that they rely on a competent tax advisor. This manifests in some unpleasant surprises for taxpayers, including that they find themselves on the wrong side of the law, they have penalties outstanding, or that they have materially overpaid taxes due to a lack of simple tax planning.
Often, these problems only reveal itself when a tax clearance is required, or when Sars takes money directly from a taxpayer’s bank account to pay outstanding tax debt.
What the taxpayer can do
Don’t assume you are in good hands. In light of SARS’ strong focus on full compliance, taxpayers must be vigilant about the compliance status of their personal account and that of their tax practitioner’s. Now, more than ever, it is advisable to proactively verify credentials and compliance before appointing a tax practitioner. This will ensure you work with professionals who adhere to the required standards. Look for tools and resources to verify your compliance status and that of your practitioner. Utilizing these tools can provide the assurance needed to navigate this critical period with confidence.
Practical steps for taxpayers
1. Check Registration: Ensure that you and your tax practitioner are registered with SARS and the practitioner with a recognized controlling body, and that they show they are in good standing.
2. Request Proof of Compliance: Ask your practitioner to provide evidence of your and their overall compliance status.
3. Use Verification Tools: Leverage tools and resources to verify your compliance status and that of your practitioner. At Tax Consulting South Africa, we use the verification tool TaxCheck to perform thorough compliance checks, on both our clients and our practitioner’s profile, to ensure our clients meet all necessary standards.
* Roberts is the expatriate tax team manager at Tax Consulting SA.
PERSONAL FINANCE