Our advocacy and leadership role as an Institute is an integral part of our service offerings to members. We engage with each of our key stakeholders regularly on both strategic and operational levels. A case in point is our relationship with the South African Revenue Service (SARS). We have established a mutually beneficial relationship with SARS, which allows us to share our members’ views effectively on legislation, and their frustrations with day-to-day operations with SARS in a constructive manner. In turn, SARS is able to share their views effectively on practitioners with us in a constructive manner that adds benefit to both practitioners and SARS.

One of the current topical issues is the ‘Regulation of Tax Practitioners’ Bill. South Africa’s chartered accountants are urging SARS to review the accreditation process in the ‘Regulation of Tax Practitioners Bill’.

In a submission to SARS, SAICA welcomed the fact that several key recommendations previously submitted to SARS by SAICA have been incorporated into the Bill.

One of SAICA’s few reservations is the prospective disadvantages that would result from the Bill’s requirement that chartered accountants register with the envisaged new “board” to be created to govern tax practitioners.

The submission contains details of SAICA’s full accreditation model that it requests SARS to consider adopting.

While acknowledging the need for competent qualified practitioners as the backbone of a well functioning tax system, SAICA draws SARS’s attention to the fact that professional bodies such as SAICA already operate in a highly regulated environment, making further regulation burdensome, costly and unnecessary.

Sketching the background to the submission, SAICA points to the prime difference between the role of practitioners and SARS thus: “The primary loyalty of practitioners is to their clients (within the ambit of the law) and not SARS. An important function of the regulation of tax advisers is to help strike an appropriate balance between loyalty to the system and loyalty to the client”.

In this context, SAICA concurs with SARS in defining the purpose of the regulation of practitioners as the protection of clients from unscrupulous or incompetent tax advisers, as well as ensuring efficient and effective tax collection through consistent and proper application of tax law.

“The regulatory interest of SARS is therefore similar to that in other areas of consumer protection. It is our firm belief that public interest is best served by ensuring the competence and quality of practitioners whilst also ensuring that an adequate number of practitioners is available to serve the public.”

In a regulation context, SAICA emphasises that:

  • its education and training process is regulated as an Education and Training Quality Assurer through bodies like the South African Qualification Authority and the Independent Regulatory Board for Auditors (IRBA);
  • its code of conduct, investigative and disciplinary processes are monitored and reviewed annually by the IRBA; and
  • its requirement that members comply with Continuing Professional Development is monitored and reviewed by, among others, the IRBA and the International Federation of Accountants.

“Although not a statutory body as envisaged in the Bill, SAICA and its members operate within the confines of various pieces of legislation, and is accredited by various statutory bodies, and remains a member of various international organisations”.

SAICA maintains that the accreditation processes to which it is subject and its global recognition ensures continued protection of public interest by ensuring the quality, competence and commitment to continuous learning of all professionals registered with the Institute.

It stresses that practitioners that belong to such professional bodies already meet the minimum requirements as articulated by SARS in the Bill’s current version.

“In this manner, only tax practitioners who are not already members of such a body need join the new body for tax practitioners.”

Alternatively, SAICA recommends a transitional period for the market to create professional bodies to cater for these tax practitioners.

Professional bodies that exceed the Bill’s minimum criteria should be granted full accreditation, says SAICA.

The advantages of the accounting institute’s accreditation proposal include the following:

  • Protecting the public interest through professional bodies, proactively alerting members of the public to the competence of the relevant practitioner.
  • Proactive monitoring of the quality and competence of tax practitioners, and sufficient reactive measures through continued accreditation of professional bodies coupled with consistent and reliable investigative and disciplinary procedures.
  • Reducing the number of members the “board” directly regulates by accrediting professional bodies.
  • Managing the potential added cost of establishing and running the “board” by regulating a handful of professional bodies as compared to a large number of individuals.
  • Reducing the ultimate added cost to business of doing business by effectively managing the cost of this regulatory structure.

SAICA recommends that SARS considers adopting an accreditation process whereby the Bill defines minimum requirements for training and education and continued professional education, along with a code of conduct and disciplinary procedures.

SAICA proposes that professional bodies able to demonstrate that they meet or exceed these minimum criteria be granted full accreditation.

The comments contained in the submission to SARS were sourced from chartered accountants throughout the country, the SAICA leadership team and members of SAICA’s national tax committee.

Nazeer Wadee CA(SA) is the Chief Operating Officer, SAICA.