WHO HOLDS THE ULTIMATE RESPONSIBILITY FOR YOUR TAX COMPLIANCE STATUS WITH SARS?

This question often arises as accounting firms and accountants encounter new clients who are not adhering to tax regulations and may claim ignorance of their non-compliance. A typical response to being informed of this is, “But I have an accountant who manages all my tax affairs!”

In situations where individuals unintentionally find themselves on the wrong side of SARS, there is a significant advantage in taking proactive steps to seek appropriate tax advice and promptly address any issues.

It is important to remember that the Tax Administration Act No. 28 of 2011 (TAA) clearly outlines the taxpayer’s obligations and responsibilities.

According to sections 25, 29, and 30, as well as section 102 of the TAA, a taxpayer:

Must submit all tax returns to SARS on time.
Is required to maintain proper records of all relevant information regarding personal tax matters.
Must submit certain relevant information to SARS in a prescribed format and on time.
Remains responsible for provident necessary and complete information to SARS when submitted tax returns or responding to queries, verifications, and audits.

In terms of Section 234 of the TAA, a taxpayer may be criminally charged if the taxpayer fails or neglects to submit a return or document to SARS.

In the case of X v the Commissioner of SARS, Case 13380, 27 January 2016, the Court ruled on the accountability of accountants for taxpayer non-compliance with SARS. The ruling stated that:

Taxpayers cannot rely on the assumption that their returns have been filed.
Taxpayers have a duty to ensure the accuracy and timely submission of their returns to SARS.
Taxpayers must ensure that the professionals they engage are diligent, rather than relying on their word.

Therefore, non-compliance resulting from the conduct of a tax practitioner is not a valid defence when facing SARS scrutiny.

If you suspect non-compliance or your tax practitioner has neglected your best interests, it’s imperative to rectify your tax affairs promptly to avoid potential criminal penalties. SARS has emphasized that non-compliant taxpayers remain a high priority for enforcement actions.

As per the information provided on the SARS website, taxpayers’ rights and obligations are outlined as follows, with particular emphasis on point 5:

A taxpayer has a RIGHT to:

A taxpayer has an OBLIGATION to:

1.	Clarity and certainty (to be informed) of obligations to SARS.
–	Be empowered and enabled as a taxpayer and trader proactively.
–	Receive customized support.
–	Have access to leverage products (digital and manual).
–	Participate in SARS surveys.

1.	Timeously engage, register, and comply with legal obligations.
–	Find out and honour due dates.
–	Register for relevant tax and subscribe to others as you meet minimum requirements.
–	Withholding any trust tax money and pay it over to SARS on time.

2.	Excellent service irrespective of the method of engagement with SARS.
–	Experience high quality service.
–	SARS to exceed taxpayer’s expectations.
–	Consistent service wherever one engages SARS.
–	Service recovery on raised issue.

2.	Cooperate in full and provide accurate and truthful information through efficient and timeous engagement via appropriate channels.
–	No understatement or over declaration.
–	Engagement is through efficient and effective means of channels.

3.	Be heard, complain and lodge disputes that are resolved timeously.
–	When not satisfied, engage the immediate supervisor / manager there.
–	Escalate through SARS complaints processes.
–	Request for reasons if one does not understand an outcome.
–	Lodge an objection within prescribed timelines.
–	Escalate to Office of Tax Ombud if exhausted SARS processes in disagreement with SARS on administrative matters.

3.	Provide all supporting documentation and information within the required timeframes.
–	Acquaint with SARS issued letters on requested information.
–	Safely store used data and or information used for tax purposes for a minimum of 5 years.
–	Observe timelines.
–	Update SARS with current contact and banking information.

4.	Be treated without fear, favour, or prejudice by SARS in a confidential manner, within the relevant legislative framework.
–	All to be equal before the law.
–	No intimidation or harassment.
–	No unfair treatment.
–	No unlawful disclosure of taxpayer declared information.
–	Be treated professionally by SARS.

4.	Act honestly and have respect for the tax system.
–	Honor your tax obligations.
–	Be loyal to the country and tax system.
–	Assist in deterring non-compliance by reporting tax fraud and non-compliance with tax legislation.
–	Refuse to collude or conceal criminality.
–	Report any fraud or criminality you are aware of.
–	Apply your fiscal citizen responsibilities all the time.

5.	Be represented by a professional.
–	Ethical, qualified, certified and or accredited practitioner / agent can be authorized to handle your matters with SARS.
–	All transactions done in the account by representative will be regarded as done by the taxpayer / trader.
–	Representative will participate in stakeholders’ forum on taxpayer’s behalf to improve tax administration.

5.	Accept personal responsibility for all SARS affairs and not abdicate accountability.
–	Your tax reference number(s) and your credentials remain your identity and will be safely stored.
–	Representation does not delegate accountability.
–	Whatever your representative is authorized to do, is on your behalf.

6.	Respect by all SARS officials.
–	Courteous behaviour all the time.
–	Respect is mutual.
–	Considered honest unless proven otherwise.
–	Delightful service experience by all SARS officials.

6.	Respect for the legislative work done by all SARS officials.
–	Accept an enquiry / transaction outcome to have been done faithfully.
–	Will be factual in all transactions.
–	Accept that voluntary compliance is a taxpayer’s responsibility.
–	Avoid tax evasion and illegal tax avoidance.

https://www.sars.gov.za/individuals/manage-your-tax-compliance-status/

Since 21 April 2023 the Tax Compliance Status system makes it easy for taxpayers to request their Tax Compliance Status (TCS) via eFiling or the SARS online query system (SOQS)

For more information on the tax compliance status processes follow the links below:

Conclusion

The relationship between a taxpayer and a tax practitioner forms the cornerstone of tax compliance. It is the responsibility of the tax practitioner to clearly explain tax laws and obligations to their clients.

Selecting the right tax practitioner is crucial. Look for professionalism, experience, expertise, and, above all, integrity when choosing a tax advisor.

If you have any enquiries, please contact Adri Britz at abritz@fhbc.co.za

Disclaimer

This article is for informational purposes only and should not be considered as legal advice. Although all efforts have been made to provide accurate information, the FHBC group of companies, nor any of its employees take no responsibility for any mistakes or omissions that may have slipped in. When in doubt, please contact a registered tax practitioner.