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2-October-2024-70

SARS (South African Revenue Service) is taking an innovative approach to overcome a shortage of skilled professionals capable of investigating and understanding complex tax structures. In a move that promises to boost its capabilities, SARS recently announced the formation of a panel consisting of the top tax consulting minds in the country. This panel will collaborate with SARS over the next five years to improve tax compliance and crack down on evasion.

Through a newly issued tender, SARS is inviting private tax consulting firms to submit proposals to join this elite panel. Each firm can nominate up to 88 tax specialists, ranging from junior to senior professionals, ensuring that SARS has access to a deep pool of expertise. This panel will cover all tax types and assist in handling highly technical tax issues.

Addressing two key challenges

This move directly tackles two of SARS’ biggest challenges: a shortage of quality resources and a lack of technical expertise to address increasingly sophisticated tax avoidance and evasion schemes. By teaming up with seasoned tax professionals from the private sector, SARS will significantly enhance its capacity to handle complex tax matters such as forensic audits, corporate restructures, and more intricate tax structures.

For many years, private tax practitioners have raised concerns about SARS’ inability to address aggressive tax structures. Now, those very experts can join forces with SARS to strengthen its enforcement efforts.

Empowering the panel

Once the panel is established, its members will be empowered to directly engage with taxpayers and traders through various means, including written correspondence, phone calls, and virtual meetings. They will also have the authority to raise tax assessments, conduct audits, and even collect taxes owed to SARS. This collaboration signals SARS’ commitment to a zero-tolerance approach toward tax non-compliance.

This approach doesn’t just stop at the taxpayer. SARS is also widening its net to include tax advisors who facilitate aggressive tax planning strategies. If you’re an HWI with complex tax arrangements, this could mean that both you and your advisors are under the microscope, with the potential for serious legal consequences if non-compliance is detected.

A common global practice

The practice of enlisting private sector expertise to support revenue collection is not new. In fact, it is globally recognized as a best practice. Countries like the United States often require private sector experience for senior tax collection positions, as this background helps tax officials know what to look for and how to ask the right questions.

SARS’ collaboration with private sector experts is designed to enhance its effectiveness in tax collection and ensure that South Africa remains competitive in the global tax arena.

What this means for taxpayers

With this new approach, SARS is sending a clear message: non-compliance will not be tolerated. For businesses and individuals who may be concerned about their tax compliance, it’s crucial to seek independent expert advice. Engaging with tax professionals who understand the complexities of tax planning and compliance can make all the difference.

MMS Group is here to assist you in ensuring that your tax affairs are in order and that you remain compliant with evolving tax regulations. If you believe you may need a fresh look at your tax planning, reach out to our team.