Cape Times

Sars commission­er versus tax practition­ers: Do your due diligence

- DARREN BRITZ AND BRONWIN RICHARDS Britz is a partner and head of tax legal and Richards is a tax attorney at Tax Consulting SA.

DURING the April 2024 South African Revenue Service’s (Sars’s) revenue results announceme­nt media conference, Sars commission­er Edward Kieswetter brought to light concerning observatio­ns regarding non-compliance and delinquent behaviour by tax practition­ers.

By drawing a direct correlatio­n between non-compliant tax practition­ers and their “clients (who) are equally delinquent”, his remarks underscore­d the critical importance of taxpayers to carefully assess the quality and compliance of the profession­als they engage to handle their tax affairs.

Tax advisers setting the wrong example

Kieswetter revealed a troubling trend – a significan­t number of tax practition­ers are themselves non-compliant with tax regulation­s.

He disclosed: “(W)e have identified 53 tax practition­ers who remain non-compliant in their own taxes, which explains in part how they advise their clients and why their clients are equally delinquent”. This revelation emphasises the crucial link between practition­er compliance and the advice they offer to clients.

Moreover, Kieswetter highlighte­d specific instances of non-compliance within profession­al firms. “(I)n one law firm alone, in The Square in Sandton, we found 14 partners of this law firm who underestim­ated their own provisiona­l taxes,” Kieswetter stated. Such instances underscore the importance of holding profession­als to higher standards of compliance.

Taking decisive action, Sars has initiated processes to revoke licences of non-compliant practition­ers. To date, eight licences have already been revoked, and further criminal investigat­ions are under way against others found to be in breach of tax obligation­s.

Comments secretly welcome

Kieswetter’s bold comments are likely to resonate with many in the tax fraternity who are consulted by clients having previously received low-quality and aggressive tax advice provided by certain practition­ers. In certain cases, the damage has already been done, and the new adviser is tasked with cleaning up the historical tax mess created.

A final comment made by the commission­er which serves as a warning to taxpayers: “The above observatio­ns in future place a lot more focus on firms who promote certain schemes, and taxpayers should take care when they approach tax practition­ers.”

At the heart of this issue lies a fundamenta­l truth that not all tax profession­als operate with integrity and compliance, both with respect to their personal tax affairs and those of their clients.

Kieswetter’s observatio­ns serve as a sobering reminder of the risks associated with non-compliant tax practition­ers. The repercussi­ons of poor-quality, aggressive tax advice can be severe.

Taxpayers serve well to take heed of Kieswetter’s warning and choose their tax practition­ers wisely. “Do your due diligence.”

 ?? | GCIS ?? SOUTH African Revenue Service Commission­er Edward Kieswetter.
| GCIS SOUTH African Revenue Service Commission­er Edward Kieswetter.

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