Compliance demands tie up SA companies research
Tax departments of SA companies spend most of their time on routine compliance activities as a result of the increased complexity of tax legislation and pressure from the SA Revenue Service, according to research by Ernst & Young.
Business Day notes the research was conducted between May and July last year among 474 companies in 14 countries, including emerging markets such as SA, Brazil and China. Corlie Hazell, National Director of Tax Accounting and Risk Advisory services at Ernst & Young, said SA companies invested disproportionate time on tax compliance. Timeliness of compliance was cited as the most important measure for the tax function by 35% of local companies, compared to 13% internationally. Business Report notes the survey showed that most of the SA companies polled did not document procedure for managing tax risks, which could lead to tax penalties and damaged reputations. According to E&Y, tax risks include action or inaction to tax strategy operations, financial reporting or compliance that would adversely affect the companys tax affairs. Hazell said that failure to manage tax risks could lead to penalties being charged on firms or damage to reputation. Full Business Day report Full report in Business Report