SARS Releases Draft Laws For Regulation Of Tax Advice

by Robert Lee, Tax-News.com, London

22 October 2004

The South African Revenue Service (SARS) has released draft legislation increasing the regulation of tax consultants and advisers in order to promote better compliance and ensure that taxpayers receive advice which is consistent with South Africa's tax laws.

Whilst a number of issues are still being considered by the government, it is anticipated that a separate board will be established to oversee the regulation of tax practitioners in South Africa, according to reports.

In the meantime, SARS has proposed an amendment to the Income Tax Act which is expected to create a requirement for all tax practitioners to register with the receiver for a transition period, until a separate bill creating the new regulatory board is passed.

However, it is thought that certain individuals will be exempted from the need to register, including advocates and lawyers who provide advice or assist clients during, or in anticipation of, litigation; insurance brokers who sell retirement annuities to clients and also advise on the tax consequences; and employees who provide advice or complete documents for their employers, such as a group tax manager or a payroll supervisor.

In addition, articled clerks, supervisors or managers of law or accountancy practices who provide advice or complete documents while under the supervision of a tax practitioner will also be exempted.

SARS has also proposed the introduction of an advance tax ruling for taxpayers, setting out the framework of rules for binding general rulings, binding private rulings and binding class rulings.

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