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Rich or not, Sars is coming for you

Apr 03 2013 11:40
woman with magnifying glass

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Five steps to avoid tax risk

Cape Town - No one will be exempt from scrutiny, the South African Revenue Service (Sars) promised this week in its update on tax compliance.

In an update on Tuesday on its Compliance Programme for 2012-2017 which was launched by Finance Minister Pravin Gordhan, Sars undertook to "pursue non-compliant behaviour to ensure that every taxpayer pays the correct amount of tax".

Sars said it is now in a position to provide feedback on progress made across the five areas of the tax base identified as key focal points for the next five years.

The super rich is one of the seven key areas the taxman identified as "posing a specific risk to the work of Sars, to the fiscus, and ultimately to the economic future of South Africa".

"High Net-Worth Individuals (HNWIs) are under the spotlight around the world," said Sars.

"According to an OECD study they pose specific challenges to tax administrations as a result of the complexity of their tax affairs; their relative contribution to tax revenues; the opportunities that their wealth provides for aggressive tax planning and the impact that non-compliance in the HNWI segment can have on community confidence in the tax system."

So who falls in this category? Sars defines super wealthy individuals as South Africans whose gross income is at least R7m, with a gross wealth of R75m and higher.

It currently has 2 300 of these on its register, and their affairs have not escaped the taxman's notice. Over the last 12 months, 280 HNWIs have undergone compliance reviews and analysis.

The result? Of these, 109 have been identified as high risk and earmarked for a full audit.

Sars conducted 62 full audits, which yielded a total of R184m. Among HNWIs, 14 have been identified as potential serious offenders because of the magnitude of their outstanding returns.

Sars said four criminal cases involving the super rich are currently under investigation.
 - Fin24

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sars  |  tax  |  sa economy  |  wealthy



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