In a recent presentation to Parliament, SARS Commissioner Edward Kieswetter reportedly noted that around 4,000 of the tax authority’s 25,000 registered tax practitioners were non-compliant, owing it some R1.3 billion rand. He also called on their professional bodies for help.
However, Phillip Joubert, Centre of Tax Excellence (CoTE) Manager at the South African Institute of Professional Accountants (SAIPA), says professional accountancy bodies, like SAIPA, should already have procedures in place to address the issue. “Having proper disciplinary processes and a proper code of conduct is part of our recognition criteria as a Recognised Controlling Body (RCB)”.
“We take compliance by our tax members very seriously,” he confirms, asserting that SARS can use these robust processes to lodge complaints against any of the Institute’s members it believes are non-compliant.
Getting the facts
“Non-compliance” can be a loaded term. When a taxpayer enters into a dispute with SARS, they can do so through SARS’ own dispute process or, in more serious cases, the tax court. Even though both parties are working towards a state of compliance, SARS still considers unpaid amounts as outstanding in the interim.
According to Joubert, SAIPA has reached out to SARS a number of times to query how the R1.3 billion is made up. So far, SARS has not been able or have been unwilling to confirm what portion is tied up in disputes.
“Obviously, we cannot chastise specific members for non-compliance if they feel they have been unfairly taxed and are already following a legitimate process to resolve the problem,” states Joubert.
SAIPA has also questioned whether the tax debt is owed by individual practitioners or tax firms to better inform its response.
Furthermore, there is a mismatch in the number of practitioners SAIPA confirms to SARS on an annual basis, and what SARS has on record. Is it possible that, at least some, of the non-compliant tax practitioners fall within this, almost, unassigned category?
A responsive process
Where cases of reported non-compliance can be confirmed, SAIPA will do everything in its power to assist SARS.
By law, tax practitioners need to be in good standing with their RCB, in this case, SAIPA.
To remain in good standing, members must abide by the Institute’s constitution and bylaws in terms of their continuing professional development (CPD), finances and legal compliance. For the latter, tax members are required to submit their SARS-issued tax compliance status PIN (TCS PIN) annually, which is checked by SAIPA’s compliance team.
Those who do not are provided a reasonable period to comply, after which SAIPA will not confirm their standing with SARS. At that point, SARS may deregister them, disqualifying them from making tax submissions for their clients.
A member whose tax affairs remain non-compliant will be subject to investigation by SAIPA’s independent investigations committee. On its recommendation, the matter may be referred to an independent disciplinary committee. That panel will determine the appropriate sanction to levy against the offender, which could result in termination of their membership.
“Deregistration and possible dismissal should be enough to deter any body’s members from falling into non-compliance,” says Joubert.
Doing the right thing
Tax practitioners who are legitimately or habitually non-compliant damage the reputation of their professional body and the profession itself, and present a risk to the public interest.
As they often advise their clients, they cannot simply wish their tax debt away.
“Approach SARS and make arrangements to settle the outstanding amount as soon as possible,” advises Joubert.