Guiding consumers since 2009

How the new tax law will affect you

By Staff Writer

For next year’s tax season the onus will be on you to ensure that your tax practitioner is registered and qualified to file your tax return on your behalf. When the season starts in July 2013, it will be illegal for a tax practitioner to file your tax return without being registered with a professional Body assigned by SAQA.


“The use of a tax practitioner doesn’t absolve you from carrying the can when things go wrong and chances are that if your practitioner’s affairs are not in order, he or she is also not paying proper attention to yours,” said Dirk Kotze, tax partner at Mazars. The main purpose of the regulation of the tax profession is to protect the public against rogue tax practitioners. “Recently the South African Revenue Service (SARS) found that 9.5% of tax practitioners, who assist some four million taxpayers, are not tax-compliant in that they are either not registered with SARS or their own tax affairs are not in order”, said Stiaan Klue, chief executive of the South African institute of Tax Practitioners (SAIT).


Keep SARS happy


Ultimately, it looks like SARS will be keeping a strict eye on tax returns in the future. “The new penalties clearly increase the risk to all taxpayers and no longer just those that sail close to the wind. Even honest taxpayers that merely make errors will now be exposed to potentially severe penalties,” said Kotze.


To mitigate any risks, Kotze recommends that taxpayers take the following precautions:


1. Perform a tax ‘health check’ on past and current tax affairs. Engage tax practitioners to review all aspects of your tax affairs – including income tax, employees’ tax, VAT etc. This may pinpoint certain areas where you’re at risk and indicate whether or not you should consider voluntary disclosure to SARS. Remember that you can’t disclose what you do not know.


2. Pay attention to administration. Proper record keeping and document retention are paramount. It may be necessary to spend time and money replacing current administration systems and staff with proper systems and suitably qualified personnel. Remember, cheap systems in the short term may prove to be expensive in the long term.


3. Seek proper advice before taking a particular tax position. Prevention is better than cure so rather ask the questions before transacting than afterward when things can no longer be undone.


4. Be prepared for an answer that you don’t want to hear. By its nature, tax is not designed to be fair, and SARS is not a paper tiger that sits back passively while taxpayers try to find loopholes. Many loopholes have been closed already, and the new penalty regimes are designed to act as a deterrent to taxpayers who are still trying to take aggressive views. Like so many aspects of life, if the tax position sounds too good to be true, it probably is.


5. Pay what is due, as and when it’s due. Don’t manipulate tax estimates and payments according to what you want the answer to be, or what you feel is fair– do it right. Avoiding an investigation and late payment penalties starts with not understating your tax position.

Recent Articles

Featured What to do when you’ve been denied a home loan

After months of scanning property sites and attending showhouse after showhouse, you’ve finally found what you’ve been looking for. But your dream of owning a home comes crumbling down when you receive the news that you’ve been denied a home loan. So, what now?

Can your retirement annuity be used as collateral for a loan?

If you have a retirement annuity, you may have wondered whether you can use this as collateral when you take out a loan. We decided to do the leg work and find out whether this is possible or not.

Best travel cards offered by top South African banks

Planning a trip abroad involves a lot of administration. You need to consider travelling arrangements, reasonable accommodation, and a daily itinerary. But have you considered how you’re going to pay your bills once you arrive? Besides considering bank costs, you also need to consider exchange rates.

Best ways to save your money short-term

For many, it seems close to impossible to save when spending on holiday getaways, Christmas gifts, while also trying to ensure there’s money left to survive January. Justmoney takes a look at the best ways you can save during the short term.

Deals

Marble Gift Card Special

Price: From R1000
When: Until 25 December 2019
Where: Johannesburg

Trennerys Hotel and Camping Januworry Special

Price: R950
When: From 10 to 31 January 2020
Where: Centane (Eastern Cape)

Bakwena Standard Packages Special

Price: From R999
When: Until 31 December 2019
Where: Nationwide