While sales, marketing and other experts are generally well understood, Tax Consultants are still an enigma for many. Businesses often don’t know that they need a Tax Consultant or they do not understand the benefits that a tax consultant can bring to the table.
In this article, we take a look at Who a Tax Consultant is and what they can do for a business.
Table of Contents
1. Who are Tax Consultants?
2. What does a Tax Consultant do?
3. What is the difference between a Tax Consultant and an Accountant?
4. Why do you need a Tax Consultant?
Who are Tax Consultants?
Tax Consultants, or tax advisors as they are sometimes called, are professionals who have specialized knowledge of the Tax Laws of a given country. They help businesses navigate complex tax laws and regulations, and help the business stay compliant at all times.
Tax Consultants spend a considerable amount of their time studying, understanding and working with the Tax Laws of a given country. They often bridge the gap between the letter of the and the practical implementation of those laws in a normal business environment.
A Tax Consultant usually keeps one eye on the business and the other on the evolving and developing tax laws and regulations. This can help a business optimise its tax position as the laws change and as the business grows.
What does a Tax Consultant do?
A Tax Consultant acts as interface to the tax laws of the land. Tax Consultants often take charge of all the relevant preparations, filing and processing of tax related submissions. By having an expert at the helm, a business can avoid unnecessary delays, fines and penalties
Activities that a Tax Consultant may undertake for a business can include:
- Representing a client in dealings with the Tanzania Revenue Authority (TRA) or other tax collection agencies.
- Collecting, organizing and preparing tax documents and returns.
- Evaluating a client’s financial and legal circumstances to determine tax liabilities.
- Assisting clients with tax issues during and after significant transitions, such as mergers or acquisitions, new business start-up or even business closure.
- Completing complex tax forms and schedules that most tax preparers are unfamiliar with.
What is the Difference between a Tax Consultant and an Accountant?
A Tax Consultant is a professional who is trained in tax laws. If you want any legal tax advice from a tax advisor, he must be a practitioner of tax related issues or running a tax advisory firm. At the same time he must be a holder of a certificate of practice.
Accountant is a more general, all-encompassing term. An accountant could be a tax advisor, but not always. Not all accountants do taxes. Some accountants do things like preparing financial statements, journal reconciliation, budgeting, etc.
Sometimes, accountants will play the role of a Tax Preparer, but not a Tax Consultant. A Tax Preparer is someone who undertakes the exercise of filling out relevant forms and documents for submission to the Tax Authorities. However, Tax Preparers do not necessarily have the detailed and technical knowledge of the laws and are often not positioned to understand changing laws and regulations.
Why do you need a Tax Consultant?
No.1 Starting a New Business
An often overlooked aspect of starting a business is that of hiring the services of a tax consultant. New businesses often try to go it alone but, more often than not, end up spending more time and resources correcting business setup issues. This could be from a simple error of not setting up a business right per the law, or something more egregious like being unaware of specific tax liabilities under the businesses category.
A Tax Consultant can help ensure a business is not only setup right but has a clear path forward on everything required from it for the foreseeable future.
No.2 Dealing with the Revenue Authorities
Tell any business owner, anywhere around the World, that he needs to report to the Tax Authority’s office for some clarification and chances are they will start sweating. Such interactions usually require a lot of time, preparation, documentation support and knowledge of Tax Laws.
This can leave a business owner spending too much time on tax issues with the authority than focusing on the business.
By appointing a Tax Consultant, a business owner can sit back and keep focus on his/her business while a professional goes about navigating such interactions with professionalism and ease.
The peace of mind that comes with hiring a tax consultant is often cited as the No.1 reason for hiring a professional and certified tax consultant.
No.3 Saving Time, and money
A savvy businessman who is able to read and understand tax laws can probably get away with not having a professional tax consultant. However, the question that one must ask is – at what cost?
Tax related issues and interactions with the relevant authorities often require dedicated time and effort. This can take the business owner’s focus away from his core business and onto administrative issues.
Additionally, being a novice or learner and trying to navigate tax laws can, and often does, result in minor errors. These can sometimes lead to penalties, fines, or even more.
By hiring a professional tax consultant, business owners can save time and money, directly and indirectly.
In a Nutshell
Whether you are a new business or an established business, the advantages offered by hiring a professional Tax Consultant, especially in Tanzania, are immense. A Tax Consultant can save your business time and money.
That said, It’s important to always do your due diligence and ensure that your Tax Consultant is certified and with adequate knowledge of the Tax Laws of the country.
The Tanzania Revenue Authority maintains a list of recognised Tax Consultants on their website which can be a good place to start your research.
Got questions or feedback?
Do you have a tax compliance query or need assistance with your Tax Assessments? Write to us at [email protected] and we will help. We are a fully fledged bookkeeping, accounting and tax consulting company that can help your business grow.