The Tax Administration Act 28 of 2011 (''TA
Act'') introduced certain administrative
provisions governing Tax Practitioners.
In terms of section 240(1) of the TA Act, any natural person who
provides advice to another person in respect of the application of
a tax act or who completes or assists in completing a tax return
must: (1) register with the South African Revenue Service
("SARS") as a tax practitioner; and (2)
register or fall under the jurisdiction of a recognised controlling
body. Professionals, such as attorneys, falling under the South
African Law Society can (and where applicable, must), therefore,
register as Tax Practitioners.
Section 241 of the TA Act allows a senior SARS official to lodge
a complaint with a 'recognised controlling body' if a
registered Tax Practitioner commits certain listed offences in
relation to a taxpayer's affairs.
It is therefore the duty of the Tax Practitioner to provide
advice in a manner that is not grossly negligent or given with an
intention to assist a taxpayer to avoid or unduly postpone the
performance of an obligation imposed on the taxpayer. Taxpayers can
accordingly with some comfort rely on advice provided by a Tax
The duty imposed on a Tax Practitioner also has an additional
benefit. Where a taxpayer has relied on and conducted its tax
affairs based on an opinion obtained from a registered Tax
Practitioner, SARS must, in terms of section 223(3)(b) of the TA
Act, cancel a penalty imposed on the taxpayer for a case where
there has been a substantial understatement. The opinion must be
based on a full disclosure of the facts and it must confirm that
the taxpayer's position will more than likely be upheld if the
matter proceeds to court.
There is also a further advantage where the tax advice is
provided by a Tax Practitioner who is an attorney, as legal advice
privilege will in most cases be applicable. In this regard,
communications with legal advisors, who are acting in a
professional capacity and which communications are made for the
purpose of obtaining legal advice, are privileged and need not be
disclosed to SARS. Essentially, this privilege extends to all
communications directly related to the seeking or giving of the
In conclusion, there are obvious benefits to a taxpayer engaging
the services and relying on the advice of a registered Tax
Practitioner. It should be noted though that a taxpayer is
ultimately responsible for his or her own tax affairs and does not
have carte blanche to unquestionably rely on advice from a
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Effective collaboration amongst government agencies, automation of processes and capacity building by tax authorities have always been identified by stakeholders as strategies for achieving an efficient tax system.
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