Tax aggression among tax professionals: the case of South Africa

This paper investigates the factors that lead to tax aggression among tax preparers in South Africa. While much has been written on the factors influencing taxpayer propensity towards avoidance and evasion, relatively little work has been done to understand the role of the preparers of tax returns in facilitating either compliance, avoidance or evasion of tax. There is a particular shortage of studies of this nature from developing countries. Since the first democratic elections in South Africa in 1994, a sometimes bewildering array of anti-avoidance legislation has been introduced, in a concerted effort to bring all domestic economic activity into the tax net. This increasing complexity has made it necessary for more taxpayers to take guidance from practitioners, enhancing their ability to influence either positively or negatively the attitudes of taxpayers to tax compliance. An understanding of the factors that influence the tax aggressiveness of practitioners is therefore crucial for policymakers. The paper isolates the key variables identified by prior research as impacting on the degree of tax practitioner aggression, and translates them to a South African context. They are then used to devise a pilot survey designed to detect various levels of tax aggression. The survey was delivered to tax professionals in South Africa with assistance from the South African Institute of Chartered Accountants. The results extend the current literature on tax aggressive behaviour by tax practitioners, and shed light on the tax compliance dynamic in a time of change