Regulation of Tax Advisors

This legislation will also affect all financial advisors who provide tax services to their clients.

With the promulgation of the Tax Administration Amendment Act at the end of last year, all tax practitioners are obliged to register as members of a professional body. Examples mentioned include the Independent Regulatory Board of Auditors, the South African Legal Practice Council, the Institute for Tax Practitioners, the Institute for Chartered Accountants or the Institute of Professional Accountants.

They also have to be registered with SARS by 1 July, in terms of the Act which came into effect in October 2012.

A report in Legalbrief Today states:

The aim is to shield taxpayers from unprofessional conduct by tax practitioners which could potentially place both their funds and reputation at risk, said SARS spokesperson Adrian Lackay. As reported previously in Legalbrief Today, the new regulations aim to hold tax practitioners accountable for the advice they give to taxpayers, and also to rid the industry of rogue practitioners. Lackay said SARS was engaged in a number of initiatives aimed at improving the compliance culture and reducing the tax gap. ‘It is proposed that the regulation of tax practitioners be divided into two phases. The first phase will be the compulsory registration of tax practitioners with a recognised controlling body. The second phase will be the establishment of an independent regulatory board for tax practitioners.’ This will start with a review of the first phase 18 months after its implementation, said Lackay.

According to Business Day Live, there is a suspicion among the tax fraternity that the framework is aimed at keeping more aggressive practitioners, involved in highly sophisticated tax-avoidance schemes, in check.

Once again, a case of the many being punished for the crimes of the few?

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