SARS boss’ message to wealthy taxpayers in South Africa
The South African Revenue Service (SARS) has embarked on a major recruitment drive and made systems improvements to improve revenue collection and widen the taxpayer net, says commissioner Edward Kieswetter.
Speaking to the Daily Maverick, Kieswetter said this includes a renewed focus on wealthy taxpayers in the country – particularly those with assets of R75 million or more.
“For honest taxpayers, this new division will help simplify their taxes and make things easier, but where we suspect dishonesty, SARS will come down hard and be vigilant for any potential corruption or attempts to hide assets,” he said.
The SARS boss said the wealth unit will primarily focus on three issues:
- The nature of income: Whereas ordinary South Africans have a single salary slip, these superwealthy individuals derive income from salaries, investments and assets, and their income is structured differently.
- Onshore/offshore financial arrangements: These could include international bank accounts or assets held offshore. SARS wants to see a full statement of assets and liabilities.
- Ownership structures: Assets are often held via a legal structure such as a company or a trust or even a special-purpose vehicle (SPV). An SPV is a subsidiary company formed for a specific business purpose or activity.
In its 2022 national budget, the National Treasury announced further proposals that appear aimed at ensuring compliance by wealthy taxpayers in South Africa.
Currently, provisional taxpayers with business interests are required to declare their assets (based on their cost) and liabilities in their tax returns each year.
It is proposed that to assist with the detection of non-compliance or fraud through the existence of unexplained wealth, all provisional taxpayers with assets above R50 million be required to declare specified assets and liabilities at market values in their 2023 tax returns.
Kieswetter said the new division will be focused on “improving visibility” and gaining a holistic view of these taxpayers’ assets and income.
He added that the unit is expected to provide certainty and clarity so that taxpayers in this bracket fully understand their tax obligations, ease compliance, and strengthen SARS’s ability to respond and have a clear view of what it is dealing with.
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