The Tax Administration Act requires that any person who renders tax consulting services or completes tax returns for a fee must register as a tax practitioner with the South African Revenue Service (‘SARS’). To register with SARS, the tax practitioner must be a member of a Registered Controlling Body approved by SARS.
Currently recognised controlling bodies are:
In addition, the following controlling bodies were automatically recognised in terms of the Tax Administration Act:
Only members of the bodies referred to above may apply to be registered as a tax practitioner with SARS. Other persons cannot be registered as tax practitioners.
The purpose in requiring tax practitioners to register is to protect taxpayers from unscrupulous tax practitioners.
In July this year, tax practitioner Nosicela Ntozini was convicted on 159 counts of fraud and for failing to register as a tax practitioner. She was sentenced to six and a half years imprisonment. She was employed by SARS as a call centre agent and submitted income tax returns for 38 taxpayers, claiming fraudulent tax refunds.
She manipulated the SARS system to secure the refunds and received a percentage of the refunds from the taxpayers in question. SARS paid out a total of R399 134 to the taxpayers. Ntozini received R109 660 from the taxpayers as her share of the fraudulent refunds.
In addition to the fraud committed by the accused, she failed to register as a tax practitioner. The failure to register as a tax practitioner is a criminal offence under section 234 (c) which can give rise to a fine or a period of imprisonment not exceeding two years.
Taxpayers can seek help from SARS officials in completing tax returns during filing season and no fee is payable for that assistance. Taxpayers should not employ SARS officials to assist in completing their tax returns as that is a violation of the SARS code of conduct.
Where a tax practitioner fails to comply with their statutory obligations, the taxpayer may lodge a complaint with SARS which in turn may then lodge a formal complaint under section 241 of the Tax Administration Act against the tax practitioner’s Registered Controlling Body.
It is important that taxpayers choosing to appoint a tax practitioner to attend to their tax affairs only appoint a duly registered tax practitioner to do so.
Tax practitioners who are not registered with SARS approved controlling body
will not be able to answer taxpayers' queries.
Image bought from i-Stock Stock photo ID:475765167 CreativaImages
Before selecting a tax practitioner, taxpayers should check with SARS, via the SARS website, that the tax practitioner they are dealing with is duly registered as required by the law. If the person is not registered with SARS, that fact should be reported to SARS so that appropriate action can be taken by SARS against the offender.
Also, where a tax practitioner guarantees the taxpayer a tax refund, and wants a share of that refund, the taxpayer should be concerned about the integrity of the tax practitioner and immediately check whether that person is, in fact, a duly registered tax practitioner.
Dr Beric Croome is a Tax Executive at ENSafrica. This article first appeared in Business Day, Business Law and Tax Review, September 2018.