PUBLIC HEARINGS BY THE STANDING COMMITTEE ON FINANCE

PUBLIC HEARINGS BY THE STANDING COMMITTEE ON FINANCE DRAFT TAX BILLS 2015 SAICA REPRESENTED BY: Prof Osman Mollagee & Mr Pieter Faber

MATTERS FOR DISCUSSION A. Scope of public hearings B. Effect of SARS information requests on the auditing profession C. Worsening the imbalance – annual encroachment on taxpayer rights D. Repeal of section 6 quin E. Sundry matters from DTLAB 15 & DTALAB 15

A. Scope of Public Hearings Annexure C and other submissions Public Hearings National Treasury & SARS Public Hearings? Issues disregarded Issues accepted Budget Speech / Amendment Bills Public hearings should not be limited to matters in Amendment Bills

B. Effect of information requests on the auditing profession AUDITING PROFESSION CHALLENGES Expectation gap High risk Increased regulation FACTS: - DECREASING PIPELINE PROFESSION IN DECLINE - REGISTERED AUDITORS +/- 4000 SINCE 2006 - CA(SA) DOUBLED IN SAME PERIOD

B. Effect of information requests on the auditing profession Information Auditing profession SARS XX What about legal privilege? Information TRUST Statutory function Information Statutory Can compel function Taxpayers

C. Worsening the imbalance of taxpayers rights Migration to self-assessment Removing certainty through diluted prescription Dilution of rights to have errors corrected

C. Worsening the imbalance of taxpayers rights Migration to self-assessment Law: Administrative VS assessment Practice: Selfassessment Adjustments for self Binding Certainty SARS advice -assessments Effect on SARS Staff? Penalties & interest

C. Worsening the imbalance of taxpayers rights X Removing certainty through diluted prescription CERTAINTY “Appropriate period” Proposals: No reasons Any official Maximum Interruption periods should alternative? apply Compelled reasons ONLY senior SARS official

C. Worsening the imbalance of taxpayers rights X Dilution of rights to have errors corrected Fairness Proposal: s 93 Reduced Noto 6 Limit months rationale RETAIN 3 years Proposal: s 98 Withdrawal Exclude undisputed errors RETAIN undisputed error

D. Credit foreign tax on service fees (s 6 quin) If foreign countries impose withholding taxes on fees, should SA grant credit? Fees Service-provider (South Africa) Services Employees No tax credit … Services become uneconomic Foreign clients

D. Credit foreign tax on service fees (s 6 quin) Service-provider (? ? ? ) Employees X Service-provider (South Africa) Employees ALTERNATIVE: Render services from elsewhere? Services Fees Foreign clients

E. SUNDRY MATTERS 1. Administrative matters a. Tax Bill oversight by Tax Ombud b. Judicial oversight - Preservation orders, agency appointments and default judgements 2. VAT matters a) National housing scheme b) Payments basis exception 3. Income tax matters a) Sole proprietor retirement savings b) Medical tax credit rollover

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