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SARS has recently made advancements to put the spotlight on individuals holding undeclared foreign financial assets. Thus far they have sent 275 wealthy South Africans letters regarding this. At this time, seeking the professional help of an experienced tax consultant is advisable to avoid non-compliance penalties.
Of the 275 individuals who have been contacted, some have already responded to the request, while others have requested more time. The tax authorities believe that there is more than R400 billion in offshore investments held by local taxpayers, and they are quickly closing in.
In February, SARS established a unit to focus on wealthy taxpayers who have complex financial arrangements to identify discrepancies. This is due to the belief that statements regarding assets and liabilities hold more accuracy to determining financial affairs than income statements alone.
Since SARS strives for voluntary compliance from taxpayers, particular attention is being paid to taxpayers with undeclared holdings. To do this they are utilising information through AEOI (Automatic Exchange of Information) from 104 countries to identify these individuals.
Through this process, SARS continues to strive towards their key objectives, which involves:
- Providing clarity to taxpayers regarding their obligations
- Making compliance with obligations easy
- Detecting non-compliance, and making it hard and costly
- Developing a high performing, diverse, agile, engaged and evolved workforce
- Modernised systems to provide streamlined online services
- Expanding and increasing the use of data to ensure integrity, derive insight and improve outcomes
- Working with and through stakeholders to improve the tax ecosystem
- Demonstrating effective resource stewardship to deliver quality outcomes and performance excellence
- Building public trust and confidence
Recent research has revealed that there is a growing threat of tax revolt. The government has been warned that action should be taken against corruption in order to avoid revolt from taxpayers, as corrupt officials and poor service delivery results in distrust. The ‘legal’ tax revolt that has already begun is the immigration of wealthier South African taxpayers, which negatively impacts the already damaged economy.
At MMS Group we offer professional tax consultant services to help you ensure compliance with all relevant regulations and avoid heavy penalties. For more information, contact our team.