By Ragiema Thokan-Mahomed and Aysha Naino

What I perceive as fair and just may not equate to the strict standards of someone more conservative. Our personal values have been influenced by where we grew up, the principles instilled by our parents and ultimately what we conscientise to be our personal moral compass.

In an attempt to realign due north, it was thought best that commonality be at the centre of it all, so was born the idea of “do unto others as you would have them do unto you” which has become a hallmark phrase in any discussion on religion and ethics. We are taught to respect each other’s differences, but what happens when there are different duties of care governing the same relationship?

Clients exercise personal ethics in their relationship with you. Their requests in respect of tax refunds are justified by their need for heavier pockets and depending on their tax assessment received from SARS, you are either the cat’s whiskers or not-the-sharpest-tool-in-the-box!  The contradiction though is you are relied upon for professional guidance and you will be tested based on your professional ethics. You will agree that you act in the best interest of your client, so I put it to you, how do you serve two masters?

Tax Professionals understand there are many ways to skin a cat and more than one way to complete taxable transactions. Tax planning provides clients with tax options that affect the manner in which they conduct business. The effect may result in a reduction or elimination of their tax liability.

It may seem like a matter of semantics, but tax avoidance and tax evasion are profoundly different. Tax avoidance lowers your clients’ tax bill through structured transactions so he client may be rewarded with greater tax benefits. Tax avoidance is completely legal, but can turn into evasion through shrewd planning and a change of intention. So, if the result yields an attempt to reduce tax liability by trickery, deception, or disguise, it becomes tax evasion and this is a crime.

I have been told on various occasions that accounting and tax are different disciplines and yes prima facie the argument may stand, but upon closer inspection it is more like the chicken and the egg debate – who came first and does it matter?

Undoubtedly, tax and accounting are related. They may be second cousins twice removed but at the heart of it, it’s a service that involves numbers and calculations and if you don’t know the rules, you will end up paying for your mistakes. I know I’ve taken the scenic route, but I assure you there is a point to my ramblings – a tax professional not only satisfies the needs of their client but is expected to act in the best interest of the public too.

If we consider the fundamental principles as outlined in the International Federation of Accountants (IFAC) IESBA Code of Ethics for Professional Accountants, we find core values – integrity, objectivity, professional competence and due care, confidentiality and professional behaviour that should be adopted by tax professionals to guide their professional compass.

As a tax professional you do not have the luxury of adjusting your moral compass to soothe your conscience because professional ethics is based on a set of acceptable standards as determined by regulation or laws.

What happens in the case of your “shoebox clients”? You know, the loyal entrepreneurs with small and medium size concerns who use the most faithful filing system, a shoebox filled to the brim with receipts, invoices and bank statements. How do you, in good conscience, guestimate for work that often has no paper trail. Perhaps you know the client’s routine so well that it’s a walk in the park. When filing a return, it is imperative you still conduct yourself with the due diligence required as if you were providing tax services for a JSE listed company. There is no exception.

Are there tell-tale signs that keep an ethical tax professional astute to the implications of their tax advice? Yes and no, remember to never ignore specific parts of the law in order to satisfy a client as this will surely lead to a compromise on your good morals and integrity. It is for this reason the Tax Administration Act does not support the charging of contingency fees.

To provide further clarity, consistency and certainty, SARS has created a specialist unit to deal with advance tax rulings (ATR). This service offers tax professionals guidance on the interpretation of tax laws.  It comes at a cost, but the information is invaluable, for more info see

Some basic ethics rules of engagement between yourself and your clients:

  1. Impose business ethics as part of the values of the firm, creating an ethical culture in the professional firm will make it easy to live by those values.
  2. Ask yourself if the reasonable tax professional would act in the same or similar manner?
  3. Consider whether the decision be defended with confidence and transparency?

Often it takes the law some time to catch-up with ethical practices. Fortunately the guess work has been taken out of “doing the right thing” with the evolution of the Tax Administration Act, in particular chapters 15-17. Tax Professionals are held accountable for the service they provide. Fines or prison sentences for two years await the tax professional that insists on involving themselves in practices that defraud SARS.

Let us not forget the SARS (Recognised Controlling Bodies) who now act as big brother- always watching. Tax Professionals are required to affiliate to a body with a disciplinary code if they intend being tax practitioners. These professional codes of conduct ensure the reasonable tax professional will at all times be an ambassador for ethical conduct in affairs that affect the public treasury. Apprehension to being a law abiding citizen will expose you to dire consequences with the authorities and may risk you losing your designation with your professional body should you vie off the path of righteousness.

So, I implore you in the wise words of Martin Luther King Jr. to remember that “the time is always right to do the right thing”.