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

MATTERS FOR DISCUSSION Scope of public hearings Effect of SARS information requests on the auditing profession Worsening the imbalance – annual encroachment on taxpayer rights Repeal of section 6quin Sundry matters from DTLAB15 & DTALAB15

A. Scope of Public Hearings Annexure C and other submissions National Treasury & SARS Issues disregarded Issues accepted Budget Speech / Amendment Bills Public Hearings National Treasury & SARS 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 - REGISTERED AUDITORS +/- 4000 SINCE 2006 - CA(SA) DOUBLED IN SAME PERIOD PROFESSION IN DECLINE

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

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 assessment Practice: Self-assessment VS Adjustments for self-assessments Certainty Binding SARS advice Penalties & interest Effect on SARS Staff?

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

C. Worsening the imbalance of taxpayers rights Dilution of rights to have errors corrected X Fairness Proposal: s93 Reduced No rationale Limit to 6 months RETAIN 3 years Proposal: s98 Withdrawal Exclude undisputed errors RETAIN undisputed error

D. Credit for foreign tax on service fees (s6quin) If foreign countries impose withholding taxes on fees, should SA grant credit? No tax credit … Services become uneconomic Foreign clients Fees Service-provider (South Africa) Services Employees

D. Credit for foreign tax on service fees (s6quin) ALTERNATIVE: Render services from elsewhere? Service-provider (???) Employees Services Fees Foreign clients Service-provider (South Africa) X Employees

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

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