The importance of tax consultants for compliance

Compliance with tax regulations is not always as stock standard as many taxpayers would like to hope which tends to result in unforeseen consequences. The help of tax consultants can avoid a plethora of circumstances that result in tax non-compliance, such as:

• failure to register for the applicable tax types,
• the devising of impermissible business strategies,
• undertaking unreasonable tax positions,
• failure to settle tax debts etc.

Unfortunately, ignorance of the law does not absolve taxpayers of their duty to abide thereto, and so professional assistance is always advised. The tax regulations of a country are ever evolving, making the industry exhilarating for those who practice in it and daunting for those who must adhere. For the latter, it is of particular importance to engage the services of the former.

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THE ROLE OF A TAX CONSULTANT

The role of a tax consultant is pivotal to the South African tax system and all its participants. Engaging the services of tax consultants is advisable for an array of matters, some of which follows:

• the minimising of tax liabilities, in a lawful manner,
• tailored tax advice, unique to the needs of the taxpayer,
• tax reviews to ensure reasonable care was taken to arrive at a tax position,
• review of business strategies for adherence to tax regulations,
• engaging with South African Revenue Service (SARS) for dispute resolution

As the adage goes, ‘prevention is better than cure’ and thus it is advisable to engage the services of a tax consultant before executing affairs that have tax implications and of course enquiring on matters for which there may be any uncertainty on whether any tax implications arise.

THE RESULTS OF NON-COMPLIANCE

Non-compliance with tax regulations may result in consequences of varying degrees, some of which may be to the taxpayer’s detriment such as cash flow issues and criminal prosecution.

In the event that a taxpayer has behaved in a way that results in a default to the fiscus, an additional assessment may be issued by SARS which will increase the capital tax payable and include an imposition of penalties and interest. When unanticipated this typically results in liquidity issues for taxpayers. To add injury to insult, a taxpayer may be required to provide their compliance status (generally, one of good standing) to obtain the very financing which would salvage their affairs or for the granting of contracts to continue operations.

Needless to say, specialized knowledge of the tax regulations of the country is paramount to remaining tax compliant. Accordingly, it is a matter best entrusted to those with expertise in the industry to avoid run-ins with the revenue authority and afford taxpayers peace of mind.

TIPS TO TAXPAYERS.

1.Remain proactive in ensuring tax compliance.

2.Engage the services of a reputable tax firm for advice.

3.Always remember, prevention is always better than cure

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