There have been mixed views in the media since the South African Revenue Service (SARS) announced its “enhancements” to the Tax Compliance Status (TCS) process on 24 April 2023. Tax Consulting South Africa has since been approached by several SARS-recognised professional bodies to provide clarity on these changes through member specialist training.
The first session with the South African Institute of Taxation (SAIT), held on 23 May 2023, provided unique insight to the new process, SARS’ strategic intent, and the views of tax professionals.
The 3 Pillars of SARS’ Strategic Intent
Before presenters, Jerry Botha (Managing Partner) and Sidney Fletcher (Manager: General Tax Compliance) from Tax Consulting South Africa, broke down the new Approval for International Transfer (AIT) process, Botha provided much-needed context behind SARS’ decision to implement these changes.
This first portion unpacked, in great detail, what Botha described as the three pillars of SARS’ strategic intent, namely:
- The source of funds;
- Statement of Assets & Liabilities (both at cost and market value); and
- Where are the funds going?
He highlighted that this shows that SARS is “following the money,” borrowing the famous line from All the President’s Men. This is the notion that non-compliance can be brought to light by examining money transfers.
Botha then quoted the SARS’ media release on 3 May 2023, which states that SARS will “ensure that all required tax payable has been accounted for, and if required, address non-compliance that is detected through a verification and/or audit.” This sentiment only solidifies the 3 pillars of SARS’ strategic intent.
However, more significantly, Botha raised the importance of compliance considering section 235(2) of the Tax Administration Act. He noted that tax practitioners should be aware that any submission of false documentation or statements on behalf of their clients is considered an offence, regardless of negligence. Upon conviction, they may face imprisonment for a period of no more than five years.
Practical step by step
From there, Fletcher, well known for providing eFiling training for SARS in the Western Cape for over 15 years, took attendees through a detailed walkthrough of a realistic scenario that one will face when submitting an AIT application.
The transparency gave attendees an opportunity to see the entire eFiling process from start to finish, revealing the sheer number of documents now required by SARS.
The enhancements are significant
Throughout the webinar attendees were asked to share their thoughts on the new process and taking into consideration the supporting documentary requirements by SARS.
The views of expressed by tax professionals during the session, do not necessarily coincide with commentary from certain advisors in the media, who claimed that the process and supporting documentation is the same and has merely been simplified.
It was revealed that -
- 88% agreed that the process has changed significantly; and
- 82% stated that the process is more complex and materially more work.
Lastly, the majority (82%) believe that given the level of detail and risk of criminal sanction, the assistance of a tax practitioner and/or an accountant is essential in this process.
One attendee’s comment echoed this sentiment and stated: “seems like the client must sit next to you when completing this application … the initial request list is going to be very comprehensive.”
Tax Consultants, Accountants and Financial Planners Gearing Up
This in-depth training provided much-needed clarity on SARS’ changes to the TCS process.
More importantly, it also highlighted that there is a need for information sharing among professionals in the sector and their clients to ensure a harmonious transition into the new system, where all parties work together to achieve a single goal – the taxpayer’s compliance.
The feedback from this in-depth training session with SAIT members was overwhelmingly positive, with many requesting a second webinar for wider staff and industry peers. This session has been set for 3 June 2023 at 10am. There are additional training sessions with other SARS-recognised professional bodies, including the FPI, and SAIPA throughout June 2023.
Submitted by Tax Consulting SA