The South African Revenue Service (SARS) has formally established a high-wealth individuals unit as it aims to improve compliance amongst wealthy South Africans.
SARS has now begun sending letters to some taxpayers, detailing its plans for the unit and how it will look at improving collections.
It also informs the taxpayer that the unit will be directly monitoring their tax portfolio and profile. The unit said it will also assign a dedicated relationship manager which will serve as a ‘central entry point to SARS’ for the taxpayer.
“Our mandate requires us to collect revenue to enable government to build a capable state that ensures economic and social development for the well-being of all South Africans,” the letter states.
To this end, SARS said it will focus on nine key objectives:
- Provide clarity and certainty to taxpayers and traders of their obligations;
- Make it easy for taxpayers and traders to comply with their obligations;
- Detect taxpayers and traders who do not comply, and make non-compliance hard and costly;
- Develop a high performing, diverse, agile, engaged and evolved workforce;
- Expand and increase the use of data, with comprehensive knowledge management, to ensure integrity, derive insight and improve outcomes;
- Modernise our systems to provide digital and streamlined online services;
- Demonstrate effective resource stewardship to deliver quality outcomes and performance excellence;
- Work with and through stakeholders to improve the tax ecosystem;
- Build public trust and confidence in the tax administration system.
“Aligned to these strategic objectives, we have also re-organised ourselves in order to adopted a segmented approach which aims at improving our service to all taxpayers, including yourself.
“As a result SARS has established a segment dedicated to high wealth individuals, who make a significant contribution to the revenue we collect.”
What can taxpayers expect?
Jean du Toit, head of Tax Technical at Tax Consulting SA, said that the new wealth unit will likely operate in a similar fashion to the large business centre, and is almost like having a private banker for your tax affairs.
Depending on your point of view, falling under the jurisdiction of the unit is a godsend, he said.
“Others may see the notice as dooming, although it is phrased in the spirit of collaboration. Perhaps, unless you have something to hide, your experience with SARS may vastly improve.”
He added that SARS promises that the unit’s service offering will be informed by “global best practice”, to ensure it delivers on its mandate.
“This is encouraging, or unnerving, depending on who you ask. It serves to note that while the unitaims to excel in its service delivery, it has been established primarily to enhance compliance among and increase collections from this segment of the tax base.”