Taxpayers face harsh penalties and incurred interest on outstanding returns if they file their tax return with a practitioner that isn’t compliant or registered. Tax filing season opens on the 1 July and around 17000 - or nearly 40% of all tax practitioners - have to undergo the professional compliance examinations or be forced to stop practising.
“The implications of this new legislation for the general taxpayer are twofold,” said Stiaan Klue, chief executive of the South African Institute of Tax Practitioners (SAIT). “On the positive side, taxpayers will now enjoy more protection as rogue practitioners will be forced out of the system. However, as the first deadline on 7 July for monthly pay-as-you-earn tax returns looms ahead, there is a danger that if the tax practitioner you use is not registered, they will be unable to file your return and thereby expose you to harsh administrative penalties and incurred interest on outstanding returns.”
On May 14, SARS appointed five industry professional bodies to assist the national revenue authority in regulating the tax practitioner industry. The recognised controlling bodies are: the South African Institute of Tax Practitioners (SAIT), South African Institute of Chartered Accountants (SAICA), South African Institute of Chartered Secretaries (SAICS), South African Institute of Professional Accountants (SAIPA) and the Institute of Accounting and Commerce (IAC). Failure to register with one of these recognised bodies by July 1 could result in the tax practitioner facing criminal sanctions.
“Failing to comply with the regulatory requirement of registration, will see many tax practitioners being forced out of the system,” explained Klue. “We have already received 2 439 applications, with 879 applicants required to write the compliance examination. However, this is far off the nearly 17 000 tax practitioners in total that still have to register before 1 July.
According to Ronel de Kock, head of education SAIT the majority of tax practitioners only became aware of the deadline when SARS issued a notice to tax practitioners two weeks ago. “But unfortunately this is not an excuse as it is not SARS’ responsibility to alert tax practitioners about changes in tax legislation such as this new regulation requirement which became law in December 2012”.