Legal privilege in tax matters

• Main Author: Delport, Jacqueline Hayley
• Format: Others
• Language: English
• Published: Nelson Mandela Metropolitan University 2016
• Subjects: Tax administration and procedure; Tax consultants
• Online Access: http://hdl.handle.net/10948/12637

In South Africa the boundaries of the common law principle of legal professional privilege in tax matters is unclear. Common law legal professional privilege in South Africa and in other jurisdictions has been a right available only to clients of attorneys. In 2015, amendments were enacted in section 42A of the Tax Administration Laws Amendment Act. These amendments set out further requirements that need to be satisfied for a taxpayer to claim his right to legal professional privilege over particular communications. The amendment does not feature any recognition of the extension of legal professional privilege for which all non-attorney tax practitioners have been lobbying for since the enactment of the Tax Administration Act. The stance taken by SARS in its non-response to the pleas for extension of legal professional privilege have both Constitutional and administrative consequences: constitutional consequences in the form of the infringement of the non-attorney tax practitioner’s right to equality and the taxpayer’s right to privacy: administrative consequences arise in the form of an infringement of an individual’s right to fair administrative justice under the Promotion of Administrative Justice Act. Foreign jurisdictions have been considered to determine whether South African is operating in line with international standards relating to legal professional privilege. Although, not every foreign jurisdiction examined for the purpose of this study, has implemented an extension of legal professional privilege, they have still ruled on the matter, or implemented an alternative solution, for example, a accountant concession for accountants. On this basis it is submitted that South Africa must implement a new provision within the Tax Administration Act defining the extension of legal professional privilege by law.