“A tax practitioner must be seen to be independent of mind and appearance”. Elaborate on the above statement.

“A tax practitioner must be seen to be independent of mind and appearance”.

Independence of mind is a state that permits provision of opinion without being affected by any influence a practitioner should not be biased in anyway when providing the services and he should exercise objectively and professional judgment. He should not provide services where there is potential conflict of interested.

Compliance with the fundamental principles of ethics may be potentially threatened by a broad range of circumstances. Self-interest threats, for instance, may occur where a financial or other interest could inappropriately influence a tax practitioner’s judgement or behaviour.


 Circumstances that could create self-interest threat for a tax practitioner engaged with a client  

The following circumstances can create self-interest threat

  • Financial interests in a client or jointly holding financial interest with a clients  ii.  Undue dependence on rental fees from a client  iii.         Having close business relationship with a client e.g. being a client’s supplier  iv.              Concerns about the possibility of loosing clients
  • Charging fees which is contingent to the outcome e.g. earning fees in form of commissions
  • Borrowings to or from a client  Family relationships




Describe the term “ethics” as used kin taxation practice 

  • Ethics refer to moral principles which a tax professional is required to observe. They are the rules of conduct recognized with respect to a particular class of pr6fessionals, in this case/those in taxation practice. Ethics can also be viewed as a consensus of experts opinion as to the necessity of professional standards.
  • Ethics apply at individual, organizational, professional levels.

Assume that you are a member of a newly formed professional association for tax consultants.

You have been requested to draft a code of ethics for the association.  


Summarise six types of professional misconduct that might arise when dealing with clients  

  • Stating or implying that the member of a professional body represents a person that the member does not represent, for instance as a way to win new clients.
  •  Disclosing confidential information about a client.
  •  Offering or giving anything of value to an individual to induce that individual to take any action, favourable or unfavourable to a client.
  • Paying, retaining or accepting a share of a fee or other monetary compensation for the referral of a person to another for the provision of tax services.
  •  Soliciting a tax assignment by assuring a specific result to the client.
  •  Initiating or pursuing an appeal, protest or refund claim on behalf of a client for which there is no basis in fact or in law.
  •  Failure to exercise independent judgement.
  •  Use of a false statement of/professional qualification to win a client or for any other purpose.    Using client references without their authority.




What are the factors a practitioner should consider in deciding whether to provide oral or written advice to a tax payer?

  • The importance of the transaction and the amounts involved. Where the transaction involves a huge amount it may be appropriate to give your advice in writing for responsibility and future references required.
  • The technical complexity involved
  • Highly complex transactions demand continuous reference to the advice provided by the experts hence the need for this advice to be in writing
  • Existence of authorities and procedures covering the nature of the transaction for which advice is sort.
  • The need to seek other professional advice in which case such reference may be documented i.e. the objective


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