With less than one month before the SARS' regulatory registration deadline on 1 July for tax practitioners, approximately 17 000 - or nearly 40% of all tax practitioners - are faced with no option other than to undergo the professional compliance examinations or be forced to stop practising and offering their services.
"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, he will be unable to file your return and thereby expose you to harsh administrative penalties and incurred interest on outstanding returns."
On 14 May, 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 1 July 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," commented Klue. " We have already received 2439 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.
Since Minister of Finance Pravin Gordhan's 2012 Budget Speech, in which he alluded to the fact that many practitioners are still not compliant, South Africa is now following the international trend in setting professional online compliance exams. These compliance examinations are similar to the tax return preparer examination set by the US Inland Revenue Service for US tax practitioners and have been introduced in an effort to increase the competence and professional level of tax services available to the public.
"In an effort to accelerate registration and assist tax practitioners to comply before 1 July, SAIT has introduced a weekly online professional compliance examination for tax practitioners for the whole duration of June," said Ronel de Kock, head of education of SAIT. "The compliance examination has an acceptable first attempt pass rate of 62%, compared to the equivalent compliance examination of the financial services board's first attempt pass rate of 35%. The remainder (of tax practitioners) are successful by their third or fourth attempt," said De Kock.
According to De Kock, 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".
