Recent developments in the governance of tax practitioners under the new SARS Interpretation Note 132 (IN132) have sparked significant discussion within the profession. 

Published on July 29, 2024, IN132 addresses the regulation, registration, and deregistration of tax practitioners with specific reference to deregistration and non-eligibility under the Tax Administration Act No. 28 of 2011 in the event of non-compliance, aimed at enhancing oversight and the compliance of tax practitioners. 

As the South African Revenue Service (SARS) intensifies its regulatory efforts, the impact on tax practitioners and their ability to operate effectively is coming into sharper focus.

IN132 outlines specific conditions under which individuals may be barred from registering as tax practitioners or may face deregistration due to their own tax non-compliance well as the period of non-qualification for registration. Key elements of IN132 include:

• Registration Requirements: Tax practitioners must be registered with both a recognised controlling body and SARS. Failure to meet these requirements constitutes a criminal offense, potentially leading to fines or imprisonment.
• Deregistration: SARS can deregister tax practitioners who have been non-compliant for an aggregate of at least six months within the past twelve months and who fail to rectify their non-compliance within a specified notice period.  It is important that both conditions must be satisfied.  This highlights the critical importance of demonstrating compliance or remedying non-compliance within the notice period, in the instance of such a notice by SARS.  
• Compliance and Response: Tax practitioner compliance is measured on a rolling twelve-month basis. Practitioners should respond promptly to such SARS notices to address non-compliance issues and avoid deregistration.

Concerns from the field and Looking Ahead

The guidance provided under IN132 was a major topic of discussion at recent events hosted by CPD Consortium. Tax practitioners voiced their concerns about the impact of the implementation of these guidelines, especially in the instance of inadvertent non-compliance. 

Tax Practitioners have a crucial role in achieving improved compliance and efficient tax administration. As SARS intensifies its drive for taxpayer compliance, finding the balance between oversight and support for tax practitioners remains of key importance.

In turn, tax practitioners should not only maintain their own compliance but also stay at the forefront of their field to ensure their clients' compliance. This involves keeping up to date with tax legislation, case law, policies, SARS operations, eFiling updates, and ethical standards. Professional development providers play a critical role in equipping practitioners with the essential resources and guidance needed to navigate these complexities effectively.

Written by Roxshanna du Toit, Independent Trust & Fiduciary Services Expert & CPD Consortium Project Co-Ordinator