SARS vs. Tax Practitioners: The Battle Over Client Communications
The relationship between the South African Revenue Service (SARS) and taxpayers is foundational to the functioning of the country's tax system, as outlined by the Tax Administration Act (TAA). However, a critical issue arises from SARS's communication strategy, which primarily targets taxpayers directly, often overlooking the equally important channel of tax practitioners. This oversight can lead to a gap in the flow of crucial tax-related information, as tax practitioners play a pivotal role in advising and assisting taxpayers with their tax obligations.
Tax practitioners are entrusted with guiding taxpayers through the complexity of tax laws, offering professional advice, and helping with the preparation and submission of tax returns. Their role is recognized under the TAA, which mandates their involvement in ensuring taxpayer compliance and accuracy in tax dealings. Therefore, the absence of direct and systematic communication from SARS to tax practitioners presents a significant challenge. It hampers the ability of tax practitioners to stay abreast of the latest tax regulations, changes in the tax system, or specific taxpayer information that could impact the advice and services they provide.
The need for SARS to engage directly with tax practitioners is not just a matter of improving efficiency or compliance; it is about enhancing the integrity and functionality of the entire tax administration system. By establishing a robust communication channel that includes tax practitioners, SARS can ensure that all parties involved in the tax process—SARS, taxpayers, and their advisors—are informed, aligned, and working towards the common goal of accurate and timely tax compliance. Addressing this communication gap is crucial for a transparent, fair, and effective tax system.
Bridging the Gap between SARS, Taxpayers, and Tax Professionals
Recent developments have shown a significant increase in direct communications from the South African Revenue Service (SARS) to taxpayers, a move presumably aimed at enhancing revenue collection efforts. While the intention behind this increase is commendable, it inadvertently sidelines tax professionals by not including them in these communications.
This oversight means that tax practitioners often remain unaware of crucial information sent to their clients, impeding their ability to offer timely and informed advice or to take necessary actions on behalf of taxpayers.
To bridge this gap and foster a more efficient tax collection and compliance ecosystem, it's essential to reevaluate and improve the communication strategy between SARS, taxpayers, and tax practitioners. Ensuring tax professionals are also in the communication loop would not only enhance the accuracy and efficiency of tax advice and compliance but also support SARS's objectives by streamlining the tax filing and collection processes.
What should SARS do to improve this practice?
To bridge this communication gap, SARS should consider taxpayers who have engaged tax practitioners for their tax matters. Enhancing communication strategies to include tax practitioners in the loop would streamline the process significantly. Considering the fundamental role of tax practitioners, SARS needs to support a collaborative relationship between taxpayers and their tax practitioners. This means ensuring SARS communications encourage taxpayers to consult with their tax practitioners on tax matters. Whether through direct notification to tax practitioners about communications sent to clients or by advising taxpayers within these communications to seek their tax practitioner’s advice, such steps are vital. They not only uphold the integrity of the tax system but also ensure taxpayers are well-informed and effectively represented, promoting overall compliance.
The Need for Tax Practitioners to Step Up
With SARS increasing its direct contact with taxpayers, it's crucial for tax practitioners, as tax advisors, to play an active role. These communications can range from simple updates to important tax filings and refund information. It's their job to respond promptly and keep client's tax matters in order and compliant. Since they're not directly informed of these communications, they need to make sure our clients understand the importance of sharing any SARS messages with us immediately.
How to Keep Your Clients Informed
It's important to talk to your clients about this increase in direct messages from SARS. They need to know that they should send any SARS communication straight to you. This is key to handling their tax issues correctly, avoiding fines, and getting refunds on time. By keeping open lines of communication and being proactive, you can ensure that your clients stay compliant, and their financial health is protected.
Steps for Tax Practitioners
Inform your clients: Let your clients know about the increase in direct communications from SARS and explain why it's important for them to forward these messages to you. We provide a handy template for you to assist with this communication.
Highlight the benefits: Make sure your clients understand that quickly dealing with SARS communications through you can help avoid problems with their taxes.
Offer to help: Be prepared to give advice and act on any SARS messages your clients receive to ensure their taxes are properly managed.
Inform your clients using CIBA’s template
Use CIBA’s template letter to inform clients of the communications issued by SARS and the importance of sending these to you.
Make Use of Tools such as Smartpractice
Tax practitioners can make use of software providers, such as DreamTax, powered by Smartpractice with full integration to efiling, displaying SARS correspondence directly on a communal dashboard. This enables tax practitioners to effectively monitor, schedule necessary actions, and maintain seamless communication with clients, including the issuance of invoices related to the services provided. The screenshots below offer a preview of what you expect to see within the system.
Screenshot 1. Correspondence type overview showing a list of correspondence that needs to be actioned.
Screenshot 2. Correspondence identified for action
Screenshot 3. Correspondence Dashboard
