It is a criminal offence to file distinct financial statements with your bank(reflecting profits), and SARS, reporting “losses”. The Tax Administration Act of 2011, enforces harsh penalties, for such Tax Crimes. The SGAFC Group’s Tax Department, will file original financial statement with profits, but use the Income Tax Act of 1962 to secure maximum tax deductions! We also harmonise the financial reporting(IFRS) with tax declaration. All tax movements for both Vat and Income Tax, are balanced and absorbed in reports. Our strict adherence to International Financial Reporting Standards, ensures neat reports are furnished, and applicable tax deductions lead to huge tax savings. SGAFC, your financial magicians..
Most tax practitioners, act as “servants” of tax authorities. Filing tax forms and collecting taxes on behalf of government, and still charging for this “service”. A tax consultant in the traditional sense, is supposed to plan in advance, where taxes can be legally reduced, as well as ensuring that YOU, THE TAX PAYER ONLY PAY THE MINIMUM. There are various methods to structure finances to reduce tax. Off course, we never promise, that NO taxes will be paid! Only the minimum. Pay your tax, but DONT leave a TIP! See below for some helpful hints…
WHAT IS TAX DEDUCTABLE?
• Section 11(a), of the Income Tax Act, allows any expense in production of income, as a deduction. This includes set-up costs of the business.
• Section 11(b) to 11(g) covers additional deductions.
• Section 18(a), allows donations to approved tax exempt organisations as deductions.
• Capital Allowances: Wear and tear, as per Practice Note 19, provide rates much higher than depreciation rates. Also note that these rates, ARE NOT, depreciation rates. Depreciation rates, should conform with AC 123 or useful life, as per IFRS.
• Section 12B provides for set-up costs on machinery to be deductible.
• Claim deductions on value(tax), not costs
IMPORTANT TAX INFORMATION
* Deferred Tax, relates to timing differences, between tax deductions and normal expenses as well as the asset book values and tax values.
* Section 13 ter, quin and sex building allowances rarely claimed. Up to 10% of the building costs deductible if the property is rented to more than 5 residential tenants.
*Lease payments on capitalised leased assets remain tax deductible, great tax savings.
See our services section. We will NEVER report taxpayers to SARS, or act as agents for them. We submit all the required taxes, but are NOT GLORIFIED TAX COLLECTORS. See article below.
THE POSITION OF THE ACCOUNTANT/TAX PRACTITIONER:
Accountants Cannot Be Unpaid Agents Of Authorities
Apart from the financial and accounting services that accountants provide, many people are oblivious to the fact that accountants are just serving a host of government departments with the work that they render. Tax, statistics and labor related issues are areas where accountants are compelled to comply.
It is believed that governments would collapse if accountants in practice were to stop submitting all the taxes on behalf of their business and individual clients. Hence, tax and legal subjects are compulsory for any accounting student.
Like all sectors of the economy, accountants play a vital role in developing society, and their services to their respective countries should be acknowledged. Their skills enable states and countries to prosper.
The statistics generated in tax forms, labor etc. is an important barometer of economic and employment growth. Accountants contribute to the formalization of businesses that would otherwise have been outside of the system. Their assistance, ensures that more businesses are established, bringing in more tax revenues for governments.
Where do we draw the line? Are accountants obliged to co-operate in every arena?
The accountant carries a huge responsibility in complying with the law at all times.
The laws of democratic dispensations, however, entitle the accountant to privacy.
Accountants are NOT at liberty to divulge certain information that is regarded as confidential. In their haste to appease authorities, they loose sight of the importance of accountant-client privilege.
Authorities, in western countries, as well as other democracies, are passing numerous laws that effectively “coerce” accountants and financial advisors to report irregularities and “suspect” transactions in tax, share dealing and financial instrument trading. After Enron and World Com, authorities are keeping a close eye on financial advisors. These regulations are welcomed, but places advisors in a precarious position.
Honest mistakes can me misconstrued, as serious transgressions. Accountants lack the capacity to scrutinize every transaction in their client’s books. The hosts of laws being passed in many countries are turning advisors into bloodhounds, when they should be “watch dogs”.
A fine balance should be struck between the requirements of the law and the needs of business owners. Clients pay for the services, after all, and their opinion matters most. Of course, unethical or illegal behavior can never be countenanced.
It is advisable that recourse should be sought in those laws that demand court orders or search warrants before information is obtained illegally by authorities. Many “demands” circumvent basic, common law principles.
Accountants should act like attorneys, and defend their client’s interests, first and foremost.
Free tax returns, for directors and principals of client firms.
Before you go….did you know we can perform a full diagnosis of your company…tax and company compliance, for FREE! Email us at: firstname.lastname@example.org