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The South African Revenue Service (SARS) is tightening oversight on trusts and wealthy taxpayers, leveraging advanced analytics and AI-powered audits to boost compliance and revenue collection. Let’s unpack what this means for financial planning and estate structuring.
Why Trusts are under the microscope
Recent reporting reveals that SARS is intensifying audits of trusts, introducing stricter enforcement, heavier penalties, and mandatory reporting requirements. Whether you’re administering a family trust or managing estate planning, expect more rigorous scrutiny of trust distributions, expense claims, and trustee reporting.
Wealthy individuals also in SARS’s crosshairs
In parallel, SARS is also targeting High-Wealth Individuals (HWIs). A dedicated HWI Compliance Unit now deploys AI and third-party data, flagging irregularities in provisional tax filings, income sources, and offshore fund transfers. Expect SARS to request income forecasts and detailed breakdowns of deductions — signals that audits may follow.
What’s driving SARS’s shift
The VAT system is often targeted by fraud due to its nature — multiple inputs, staggered output declarations, and frequent refunds. SARS is now flagging suspicious refund patterns, supplier discrepancies, and inconsistent turnover declarations.
Under Project AmaBillions, SARS can:
AI and advanced analytics
SARS is using machine learning to scan for anomalies across millions of data points — including provisional tax submissions, fund transfers, and trust distributions — enabling real-time risk assessments.
Third‑party data sources
Independent records from banks, financial advisors, and fund managers are now feeding SARS’s systems, further limiting opportunities for underreporting or misclassification.
Resource expansion
Reports suggest SARS has grown its investigating team, potentially doubling staff dedicated to high-value audit functions.
What affected individuals and trusts should do
- Review trust deeds and ensure all distributions and expenditures are justifiable and properly documented.
- Update annual tax returns and disclosures, including reports of beneficiaries and beneficial ownership, assets, and expenses.
Robust HWI tax planning
- Ensure provisional tax filings are accurate and supported by up-to-date forecasts.
- If you hold offshore assets or anticipate significant fund transfers, verify that AIT (Approval for International Transfer) filings are current and complete.
Maintain audit-ready records
- Keep comprehensive documentation: financial statements, contracts, invoices, correspondence, and beneficiary reports.
- Retain third-party confirmations — bank statements, advisors’ reports, and fund manager signatures.
Consult MMS income tax experts
- Work with our team of qualified professionals to review your structures and filings, and ensure any potential red flags are identified.
- Get ahead of SARS queries with pre-emptive health checks or mock audits.
Compliance is non-negotiable
2025 marks a new era in SARS enforcement — with trusts and high-value taxpayers squarely in their sights. The combination of technology-driven insights, enhanced data analytics, and deeper resource allocation makes SARS’s approach more strategic and proactive than ever. Whether you’re managing a trust, hold significant wealth, or both, proactive compliance and meticulous planning should be your strategy.
At MMS Group, we partner with trustees and high-net-worth clients, to strengthen compliance, defend against audits, and optimise your tax planning. Let’s ensure your financial structures are solid and resilient — long before SARS comes knocking. Reach out to our team through our website.