Just over two-thirds of tax practitioners would opt to self-learn a service that was outside of their standard scope of expertise if asked by a client, according to a recent survey by the Professional Partner Network (PPN), a division of Tax Consulting SA.
The firm said the survey revealed an alarming trend in the local profession suggesting that a large number of tax professionals were willing to take on specialised assignments, for purposes of client retention, without having the necessary experience or qualifications.
“As commendable as self-empowerment and learning is, in a field as niche as tax, this can do quite the opposite, with the only learning experience being how to handle a malpractice or professional negligence claim, should things go south. One example is the recent well-publicised case of Wiese (Commissioner of the South African Revenue Service v Dr Christoffel Hendrik Wiese and 3 others), which judgement showcases a clear shift in SARS’s strategic objectives, by angling to enforce tax collection by holding the advisers to account.”
The firm said that although it was noble to provide one’s clients with the best full-service suite one could, taking on work outside one’s area of expertise was not in the client’s best interest, nor did it maintain the standard of professionalism required in the tax fraternity.
Tax Consulting SA said that from their experience in the market, as well as that of their respected partners, it was clear that learning a competency on-the-fly was not viable, nor a sustainable means of doing business in a highly competitive market.
The survey is said to have further brought to light that the vast majority of practitioners (roughly 9 out of 10), confirmed that the extent of their expertise lay predominantly in personal income tax, VAT, domestic corporate tax and payroll.
The minority, or balance, (about 9.85%), indicated expertise in niche areas such as wealth succession planning, international business tax, and customs and excise.
Keith Engel, CEO of the South African Institute of Taxation (SAIT), says tax practitioners are at their best when they operate within their areas of expertise. “Yet, they can only focus on the services for which they are qualified if they develop their practice accordingly.”
He suggests a number of steps to achieve this goal, which include developing a sector specialisation, such as a focus on medical practices; implementing efficient practice management for proactive customer service; embracing a continuous focus on marketing; and building a strong network of external practitioners to whom specialised matters can be referred.
Engel says that South Africa is a market saturated with a high number of tax and tax-related practitioners, so firms should use this guidance to rise above the noise.
Over 400 tax practitioners took part in PPN’s study, providing insights into current industry trends. The survey invited tax practitioners, accounting practitioners, legal practitioners, wealth and asset management firms, as well as global advisory companies involved in all areas of tax, to participate. PPN allowed these practitioners to call out the most significant operational, regulatory and legislative challenges experienced by tax professionals in South Africa.
The survey aimed to improve the level of support provided by industry bodies and expedite often-onerous interactions with government tax agencies.
Despite the limited services most of these firms were able to provide, around two thirds of them indicated their desire to grow their company and expertise. However, there was often no sound business plan as to how this would be done, besides providing services beyond their current scope.
Tax Consulting SA said that it seemed apparent that the pressure to expand in the face of stiff competition was what drove many tax practitioners to accept assignments they lacked the competency to perform.
What also came out visibly in the survey was that many practitioners were aware of this problem. They expressed a definite need for upskilling in these competencies to adequately assist their clients.
In addition, more than half of the participants strongly agreed that they needed more assistance from their professional body with marketing and managing their practice.
SAIT said it provided its members with professional support in several ways. For example, members benefited from numerous webinars and articles. The institute also provided an electronic tax query helpline operated by tax experts. This service acts as a sounding board for members and offers quick turn-around times.
A large portion of these benefits were supplied at no additional charge.
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