The South African Revenue Service (SARS) is now cracking down on high-wealth individuals (HWI), according to Tax Consulting South Africa.
The organisation said that the revenue service has introduced a new initiative to create a bond with these rich South Africans.
Earlier this year these wealthy individuals received an introductory note informing them that Sars had created a ‘Dedicated Relationship Manager’ for their needs.
According to the note SARS hopes to have a different relationship with the mega-wealthy taxpayers.
“The note is framed as a shift in how SARS interacts with its high-value taxpayers, offering a more personalised approach to tax compliance and advisory services,” Tax Consulting explained.
So how much does a South African need to have in order to be seen as a HWI by the tax man?
SARS said that an HWI is a person who has gross assets worth R75 million or more.
SARS said that these taxpayers have an “important role” in SA, especially in building and sustaining our economy.
Therefore a specific unit needed to be created to deal with these individuals. In 2021 the High Wealth Individual Unit was created to assist these HWI taxpayers with complying with SA’s regulations.
Tax Consulting has now come out and said that the “dedicated relationship managers” provide numerous benefits for these rich South Africans but the firm said that the rationale, benefits, and consequences are unclear.
The consulting firm argued that this new specialised attention from SARS is just going to place these individuals under more scrutiny.
Over the years, Tax Consulting said that they have seen increased pressure on HWI taxpayers and this is just going to get deeper with the new relationship managers.
No room for non-compliance this tax season
It's not just HWI taxpayers that are feeling the pinch of the revenue service.
Lambert Roberts, Expatriate Tax Team Manager at Tax Consulting said that SARS is cracking down on all taxpayers this filing season.
He warned South Africans, who use tax practitioners to be extra vigilant.
“South African taxpayers who want to do the right thing, face rising concern over non-compliant tax practitioners whose actions can spring nasty and costly surprises on unsuspecting taxpayers,” he explained.
“If you use a bad tax practitioner, SARS has placed you on notice for the risks you take. It states the importance of being fully compliant because as a taxpayer, your tax affairs ultimately remain your own responsibility,” he added.
Roberts said that you should not assume you are in good hands.
“In light of SARS’ strong focus on full compliance, taxpayers must be vigilant about the compliance status of their personal account and that of their tax practitioners.”
“Now, more than ever, it is advisable to proactively verify credentials and compliance before appointing a tax practitioner. This will ensure you work with professionals who adhere to the required standards,” he concluded.
IOL BUSINESS