The tax panel discussion at SAIPA’s 2023 Accounting iNdaba touched on a number of important topics, but one of the key focus areas was undoubtedly what reporting will look like in the future.
The world is on the precipice of change with technology once again acting as the catalyst. As tax is the lifeblood of this change as countries forge ahead into this future, it is useful to take stock of where we are now and where we are going.
This was exactly the point emphasised at a panel hosted at SAIPA’s 2023 Accounting iNdaba where key members of the industry gathered for a discussion on the future of taxation in the age of digital transformation.
One of the last, and arguably most important, questions of the panel came from SAIPA’s own Ettiene Retief. Retief asked the panel about certainty in the tax system, the complexity of legislation and how practitioners can provide guidance in the next three to five years. His question centred around transactions that are done today and the reporting of that which needs to happen in the future.
Retief made mention of the recent case of the restaurant chain Spur which took its tax matters all the way to the Supreme Court of Appeal.
Khanyisa Cingo-Ngandu, Head of Tax, SNG Grant Thornton responded, “I want to start off by saying maybe we’ve been lucky. A lot of our clients, feel when we engage with SARS, there is a good level of collaboration, and we work fairly well.
“I haven’t had any challenges or any reason to believe that on any specific matter, if the law today allows my client to interpret or conclude transactions in a certain way, then in three years’ time, if the law changes, my client will be in any way penalised. I think there has been a bit changes for sure in the tax legislation in the past couple of years, but they haven’t been that major,” Cingo-Ngandu said.
Retief agreed with this sentiment as, even if the system changes, it is better to be correct right now no matter what happens in the future. This allows for the management of risk and, as the old wisdom goes, risk can never be removed entirely, only managed, and tax is no different.
Jashwin Baijoo, Head of Strategic Engagement & Compliance, Tax Consulting SA, continued the discussion by bringing it back to data. The concept of data integrity and correctness was a common thread of the panel.
Access to this dependable data for both SARS and those working with SARS will be key for digital transformation to be done correctly. Data is the bedrock of the digital transformation roadmap and getting it right will be Tax Professional 13 REPORTING important for tax practitioners, taxpayers and SARS itself.
Firdoze Abdool Sattar – Associate Director, Deloitte Africa Tax and Legal – had a unique take on the subject and continues the focus on taxpayers. Instead of looking at SARS, tax legislation and the external taxation system, the director changed the perspective to the taxpayer. As digital transformation happens the taxpayer will need to change with it, otherwise what is the point of changing the system at all?
“They need to start adopting digital transformation, and they need to already start [doing] what other countries are doing. It’s coming. But I think what’s important from a change in legislation going forward, and where I’ve seen in particular countries fail, is that we come up with this great e-invoicing solution, or we come up with some form of that modernisation, and there’s reluctancy from taxpayers because there’s not proper law that gives guidance that, all right, if I put my invoice to an invoicing machine, if I don’t have my customer’s VAT number, so we’re not going to pass it,” Sattar says.
“I think that’s where SARS needs to say, well, this is our current legislation, but as we look to modernise and as we look to change the way that taxpayers need to integrate the information with us, how are we going to change the legislation and how are we going to make it practical for taxpayers so they understand how to be compliant? And I think that for me is where the change is going to happen going forward.”
With so much complexity in the tax system that may become even more complex with the advent of increasingly abstract and intelligent technology, the truth is that no one in the system will have all the facts. This is the opinion of Mark Kingon: Stakeholder Relations, SARS, another panellist in the conversation. With decades of experience, even he admits to the massive undertaking that is complete assurance in this field.
“So I’ve been on this journey for 40 years. You think you’ve got clarity in your mind and a curveball comes with some facts that throw you in terms of tax. I think it’s going to be an ongoing journey for years to come…. You always go back to the law. You don’t go back to the guide. You go to the law. But whether we’ll ever be in a place that you’ve got 100% certainty on everything? Never, not in my experience,” Kingon says.
While that is a sour note to end on it is, chiefly, realistic. The truth is that, while digital transformation has changed taxation in many ways, some fundamentals will never change. All members of the taxation value chain need to work in unison to get things right as no one individual and no one company has all the answers. A single practitioner should never be the sole source for important tax decision-making as we all navigate this new technology-driven ecosystem.
This approach to close collaboration will pay dividends as matters become more complex. While much talk was had in the panel discussion around legislation and compliance to it, how will those who make the legislation react to matters which are infinitely complex such as Artificial Intelligence (AI)? The way forward through this complexity is as a unified front.