Johannesburg - The South African Revenue Service (SARS) and the Banking Association of South Africa have signed an accord to improve the levels of tax compliance countrywide.
Briefing reporters at the signing of the accord on Thursday, outgoing chairman of the Board of Directors of the Banking Association, Dr Steven Booysen said the agreement establishes a platform for constructive interaction between the industry and SARS.
He further said the accord will lead to an interaction that will contribute to the ongoing-socio-economic development of the country.
"We've been engaging SARS over the years to formalise a constructive relationship. We are a critical element of the economy of the country and we believe it is appropriate that we indicate the importance of establishing sound interaction between business and SARS.
"We are totally committed to sound tax morality and continue to endeavour to instil sound tax practice across the industry," he said.
The accord also encourages the banking industry to promote tax compliance, both within banks and their clients, to periodically determine the effective tax rate of banks and to regularly engage SARS to resolve any matters of dispute.
On the other hand, the accord encourages SARS to dedicate specific resources to the banking industry and ensure professionalism in the services they provide to the industry.
Mr Booysen said they were committed to encourage its members to internalise the terms of the accord in their operations.
SARS Commissioner, Pravin Jamnadas Gordhan also reiterated that the agreement would establish a framework for co-operation between the parties to discourage impermissible tax arrangements, while on the other enhancing service.
It will further seek to enhance the relationship between SARS and the banks as well as providing greater certainty on the interpretation and application of tax and custom laws and the identification of tax risks.
"As SARS, we are committed to offering dedicated services to the banking industry through the Large Business Centre which will include the appointment of a taxpayer relationship manager to focus exclusively on the banking industry.
"We will deepen our understanding of the banking industry in terms of building technical and professional skills," he said.
Mr Gordhan said they also aim to offer an advance ruling system that is responsible and facilitates tax certainty for banks and the industry as a whole.
He also promised that they would promote the highest standards of tax compliance and also discourage practices that were inconsistent with the law.
The two parties said the accord would establish a guiding framework for future engagement.
"The framework will promote exemplary service offerings to the banking industry, while pursuing a climate of higher tax morality.
"A key feature of enhanced relationship will include the establishment of a Banking-SARS Forum which will seek to promote tax certainty for Banks."
However, these matters have the potential to be translated into industry standards once accepted by both SARS and the Banking Association Board.
Deputy Finance Minister, Nhlanhla Nene also witnessed the historic signing of the accord.
