Fitting the (amended) Bill
THE LEGAL PROFESSION is breathing easier after the publication of a second draft of the Tax Practitioners’ Bill, which seeks to regulate that profession. At issue was the belief held by SA Revenue Service that many people are acting as tax practitioners who aren’t qualified to offer advice in a tax environment that’s become highly complex and sophisticated over recent years.
Robin Beale, a consultant to audit firm PKF, says the vast majority of tax practitioners are qualified attorneys or chartered accountants and already regulated by the Law Society or SA Institute of Chartered Accountants (Saica) respectively, leaving only a small minority not already regulated under those highly-regarded self-regulating organisations.
Says Beale: “There are indeed many bookkeepers and non-Saica registered accountants who do the tax returns for small business clients and typically do a satisfactory job.”
The legal profession’s concern was that the Bill posed an attack on its independence and client privilege in order to regulate a minority of the accounting profession.
There were other issues at stake, notably the provision that tax practitioners report to Revenue any irregularities they came across in consulting to a client. David French, associate director at Ernst & Young Tax Technical Services, says that provoked particular resistance from the tax
profession. “The second draft of the Bill has removed many of the concerns of the profession and no longer seeks to turn us into ‘tax police’. The new Bill looks a lot easier to implement, though it’s not without difficulties for the tax profession,” says French.
Most tax practitioners appear supportive of the concept of regulation and the current thinking of SA’s lawmakers appears to favour allowing lawyers and CAs to be regulated by their own governing bodies, as opposed to creating a new and unnecessary layer of oversight that would inevitably overlap the Law Society and Saica.
“We think there’s merit in the regulation of tax practitioners from the perspective of ensuring people have the right qualifications and experience to do the job. It would rid the profession of unqualified people,” says French.
Dermot Gaffney, head of KPMG’s indirect tax practice, endorses that view but adds a concern that the draft Bill is somewhat parochial in its lack of recognition of foreign qualifications. Large accounting firms – being as multinational as they are – frequently relocate professional staff between countries.
Gaffney says people with overseas qualifications won’t qualify as tax practitioners under the Bill. “ That’s a further barrier to the importation of skills. Tax law doesn’t vary that much from country to country – and how long can it take to learn the differences? There should be proper recognition under legislation in alignment with those foreign professional bodies recognised by Saica.”
A further barrier to the importation of skills. Dermot Gaffney