REMAIN COMPLIANT: TAX PRACTITIONERS WARNED

The South African Revenue Service (SARS) works together with recognized controlling bodies (RCBs) to regulate the tax profession. The goal is to establish consistent standards and enforce rules to improve professionalism in taxation. It is mandatory for tax professionals to register with both an RCB and Sars to legally practice and provide tax services for a fee.

If someone fails to comply with this requirement, they can face criminal prosecution. Additionally, not maintaining compliance with RCB standards and tax practitioner requirements may result in disciplinary measures, including the revocation of professional membership and registration with Sars.

Being a member of an RCB offers various benefits, such as access to compliance and technical support services. For example, the South African Institute of Taxation (SAIT) provides representation, education, and direct access to Sars for its members.

Compliance with professional and ethical standards is crucial. RCBs, like SAIT, set eligibility criteria, codes of conduct, and guidelines that incorporate Sars regulations and statutory requirements. Failure to adhere to these standards can lead to disciplinary actions, ranging from reprimands and fines to membership suspension or termination.

Two common examples of non-compliance are disciplinary records and contingency fees. A tax practitioner who doesn’t meet RCB and Sars standards may face disciplinary action, and their records are shared with Sars annually. Charging contingency fees based on taxpayer refunds creates a conflict of interest and can obstruct tax administration and revenue collection.

Compliance with regulatory requirements is also essential. Tax practitioners must ensure their personal tax affairs are in good standing to avoid deregistration. Non-compliance with personal tax can result in a mandatory six-month suspension and exclusion from RCB registration. Criminal and disciplinary history involving fraud or dishonesty can also disqualify an individual from holding a position of trust in the tax profession.

Continued professional development (CPD) is another requirement. Tax practitioners must complete a minimum number of CPD hours annually, including tax-related learning, profession-related learning, and ethics. Failure to meet these requirements may lead to fines and disciplinary actions.

Other forms of non-compliance include failure to provide requested documentation, poor payment history, disregarding disciplinary board findings, non-compliance with Sars Compliance Audits, and violating SAIT policies.

Penalties for non-compliance can include temporary membership suspension, Sars deregistration for six months, inclusion in a non-compliant list, exclusion from RCB membership, or permanent termination of membership and registration. Meeting the membership and compliance requirements helps avoid these penalties.

Engagement between Sars and RCBs has created a new space for meaningful dialogue. Still, with increased enforcement and deregistration of tax practitioners for non-compliance with membership obligations, various applicable codes and laws, including proper maintenance of personal tax obligations, SAIT members and the collective tax professional community are encouraged to consider their respective compliance as an integral part of their professional careers as opposed to a mere grudge purchase. In essence, the potential adverse repercussions for non-compliance do not outweigh the efforts it may require to maintain healthy compliance.