Have you ever considered the relationship between the South African Revenue Service (SARS) and taxpayers? Well, let us tell you, it’s pretty crucial to the functioning of the country’s tax system. The Tax Administration Act (TAA), a key legislation governing tax administration in South Africa, outlines the importance of this relationship and the role of tax practitioners. However, a critical issue needs to be addressed. SARS’s communication strategy primarily targets taxpayers directly, often overlooking the equally important channel of tax practitioners. And this oversight can lead to a gap in the flow of crucial tax-related information.
Tax Practitioners foster compliance and strengthen tax system integrity.
With their profound knowledge of tax laws and their pivotal role in guiding taxpayers, tax practitioners are not just essential, they are the backbone of the tax system. They are the professionals entrusted with advising and assisting taxpayers with their tax obligations, offering professional advice, and helping prepare and submit tax returns. Their role, recognised under the TAA, is not just crucial, it’s irreplaceable, in ensuring taxpayer compliance and accuracy in tax dealings.
However, the lack of clear and systematic communication between SARS and tax practitioners is not just a challenge; it’s a significant hurdle. It severely hampers the tax practitioners’ ability to stay updated with potential amendments to tax regulations, the tax system, or even specific taxpayer information that may impact their advice and services. This not only affects their efficiency and compliance but also undermines the integrity and functionality of the entire tax administration system, posing a serious threat to the country’s tax collection and compliance ecosystem.
Moreover, these challenges highlight the need for greater transparency and cooperation to ensure all parties work together and that tax practitioners can access the information they require to provide their clients with the best possible advice and services. This will strengthen the integrity and functionality of the entire tax administration system, fostering greater trust and confidence among stakeholders.
SARS correspondence and the tax practitioner
SARS has undertaken several measures to improve its revenue collection efforts, such as introducing auto-assessments for individual taxpayers. Auto-assessments are a process where SARS uses the information it has on hand to calculate a taxpayer’s liability or refund. However, these initiatives have unintentionally disregarded the importance of tax professionals by excluding them from this communication process.
The non-involvement of tax practitioners in SARS’s communication loop can lead to their lack of awareness of critical information sent to their clients, such as changes in tax regulations, audits, or requests for additional information. This lack of awareness ultimately hinders their ability to provide timely and informed advice or take necessary actions on behalf of taxpayers. To address these gaps and establish a more efficient tax collection and compliance ecosystem, it is essential to reconsider and enhance the communication strategies between SARS, taxpayers, and tax practitioners.
What should tax practitioners do to improve this practice?
One approach to managing the increase in direct messages to clients from SARS involves engaging with each client individually. This labour-intensive and manual method requires informing clients that any SARS communication they receive should be sent directly to their tax practitioner. Effectively managing this process is critical to handling tax issues correctly, avoiding penalties, and securing timely refunds. Proactive communication and open lines of dialogue between clients and tax practitioners are essential to ensuring compliance and protecting clients’ financial well-being. It is important to emphasise to clients that dealing with SARS communications through their tax practitioners can help them avoid tax problems further down the line.
Alternatively, tax practitioners can take control of the situation by using an online platform to manage all SARS correspondence that directly integrates with SARS, such as Konsise. Konsise is a South African-built software platform that enables tax practitioners to connect multiple SARS profiles into a single view. It displays all client correspondence, notifications, and verifications in an easy-to-understand dashboard and sends copies of the SARS correspondence emails directly to tax practitioners in near real-time. By utilising this secure platform, tax practitioners can take a proactive approach to staying informed, improving their efficiency, and ensuring timely and accurate responses to SARS.
By prioritising communication, compliance, and transparency, tax practitioners cannot only ensure the smooth functioning of the tax system but also protect their clients’ financial well-being. Let’s work together to keep everyone informed and aligned, as this is not just about taxes, it’s about building a better financial future for all.
