Business

A concerning trend is emerging among tax professionals

[ad_1]

A recent survey conducted by the Professional Partner Network (PPN), a division of Tax Consulting South Africa, revealed an alarming trend in the tax profession.

It found that just over two thirds of tax practitioners would opt to self-learn the performance of a service that is outside of their standard scope of expertise when asked by a client. The service would be performed solely on this basis.

This suggests that, beyond the focus group, a large number of tax professionals are 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 three others), with the judgment showcasing a clear shift in the strategic objectives of the South African Revenue Service (Sars), by angling to enforce tax collection by holding the advisors to account.

Read:

Albeit a noble reason to provide one’s clients with the best full-service suite offering, enabling client retention in a saturated tax environment, such behaviour is not conducive to the client’s best interest, nor maintaining the standard of professionalism required among the tax fraternity.

From our experience in the market, as well as that of our respected partners, it is clear that learning a competency on the fly is not viable, nor a sustainable means of doing business in a highly competitive market.

Grow or go

The survey further brought to light that the vast majority of practitioners, roughly nine out of 10, confirmed that the extent of their expertise lies predominantly in personal income tax, value-added tax (Vat), domestic corporate tax and payroll.

The minority, or balance, being roughly 9.85%, indicated expertise in niche areas like wealth succession planning, international business tax, and customs and excise.

Despite the limited services most of these firms are able to provide, around two thirds indicated their desire to grow their company and expertise – but with no sound business plan as to how this would be actioned, aside from providing services beyond their current scope.

It seems apparent that the pressure to expand in the face of stiff competition is what drives many tax practitioners to accept assignments they lack the competency to perform.

Self-awareness

What comes out visibly in the survey is that many practitioners are aware of this problem.

They expressed a definite need for upskilling in these competencies in order for them to adequately assist their clients in areas requiring niche expertise.

Read: Sharp drop in CA candidates writing ITC exam

In addition, more than half of the participants strongly agreed that they need more assistance from their professional body with marketing and managing their practice.

The solution

Tax practitioners are at their best when they operate within their areas of expertise, and can only focus on the services for which they are qualified if they develop their practice accordingly.

A number of steps to achieve this goal are suggested:

  • Develop a sector specialisation, such as a focus on medical practices;
  • Implement efficient practice management for proactive customer service;
  • Embrace a continuous focus on marketing; and
  • Build a strong network of external practitioners to whom specialised matters outside your expertise can be referred.

South Africa is a market saturated with a high number of tax and tax-related practitioners, and firms should use this guidance to rise above the noise.

If practices dedicate themselves to these behaviours, they can attract enough clients to sustain their business based solely on their core competencies. Then, referring special cases to practitioners experienced in those areas will be a painless experience.

Professional support

The South African Institute of Taxation (Sait) also provides its members with professional support in several ways.

For example, Sait members benefit from numerous webinars and articles. The institute also provides an electronic tax query helpline operated by tax experts. This service acts as a sounding board for members and offers quick turnaround times.

A large portion of these benefits are supplied at no additional charge.

About the study

Over 400 tax practitioners took part in PPN’s landmark 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 aims to improve the level of support provided by industry bodies and expedite often-onerous interactions with government tax agencies.

Sign up to receive the survey results here.

Keith Engel is CEO of the South African Institute of Taxation (Sait).

[ad_2]
Source link

Related Articles