The rising cost of taxation: an exercise in mitigation

The rising cost of taxation: an exercise in mitigation from Anton Apps International Recruitment Specialists

By: Anton Apps International Recruitment Specialists  11-19-2008
Keywords: Executive Search, Career Management, Financial Recruitment

Though corporate tax in South Africa did ease a percentage point this year to 28%, many blue-chip companies are still feeling the pinch when having to meet their obligations to the taxman. Last year, three JSE-listed companies were hit with shock tax assessments, some running into the billions. The JD Group was warned it may have to cough up additional taxes to the tune of R222 million – excluding interest and penalties. Nampak was found to owe SARS R250 million; and BHP Billiton faced a total tax bill of US$1,325 billion following an assessment by the Australian Taxation Office (source: MoneyWebTax, 12/12/07).

Such cases serve as fair warning to any company to get its tax affairs in order and mitigate its liability; the most effective way to mitigate this risk is to have an excellent team of internal tax specialists. According to Marius van Blerck, Director of Group Tax at Standard Bank, “establishing and maintaining a robust, technically skilled and commercially-focused tax department is critical. It requires suitably qualified tax professionals who can build a strong relationship with SARS, ensure internal tax compliance, partner with business units, interact with appropriate advisors and help promote continuity and transfer skills in the department by mentoring junior staff.”

Van Blerck continues: “Importantly, members of the tax department must be able to ‘sell’ the concept of tax compliance and enlist support for mitigation or risk-reduction exercises. As this requires effective interaction across the business, such individuals should be equipped with suitable ‘people’ skills.” Understandably, this individual is a rare breed. “And one that’s highly in demand,” notes Anton Apps CA, whose financial recruitment firm antonapps recently conducted an industry-wide salary survey within the tax sector on behalf of a client. “Not only are there relatively few tax specialists in the country, but they are generally more conservative and tend not to flaunt themselves around the market. This impacts on the recruitment style utilised: they have to be actively recruited using a Managed Recruitment Process and, in most cases, generously remunerated.” Salaries are therefore relatively high.

Referring to the results of the salary survey (see table included), Apps draws attention to the fact that cost to company for a senior corporate tax position in Group Tax is on average R800000, with a R240000 annual bonus. “It’s a supply and demand issue,” he notes. “However, given the relative enormity of corporate tax bills, the payroll cost of fairly-sized tax division is immaterial. This is a ‘no-brainer’ spend – but ensure that you are highly selective, and that the appropriate recruitment methods are used for this unique population.”

With an in-house tax recruitment specialist and over 17 collective years of experience in the local tax market, antonapps is ideally positioned to assist companies in selecting the right individual, or team, to meet their specific requirements. For more information contact 0861 788 7880 or email [email protected]

Keywords: Career Management, Executive Search, Financial Recruitment, Inbound & Outbound Relocation Recruitment

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