High-Wealth taxpayers naturally equate to high tax collections, but no matter how much money you have, you cannot afford to be non-compliant with a revenue collector on a compliance crusade!

Giving credence to this strong stance on the eradication of non-compliance, at all levels, Sars’ High Wealth Individual Unit has resolved to bolster its manpower, geared at building “a smart modern Sars”.

On the face of it, this may appear to follow suit from prior recruitment drives by the revenue collector, however what taxpayers may miss, is the vacancies are targeted at highly specialised legal, risk, and audit assassins:

Excerpt from Sars Vacancies – High Wealth Individuals

Indiscriminate Eradication of Non-Compliance

The age-old adage that money cannot buy happiness, rings equally as true for compliance, with Sars making clear that no matter how much money you have, if you are non-compliant, you are on their hit-list.

Bearing testimony to this, are Sars’ recent criminal prosecutions ranging from VAT fraud syndicates to local celebrities, and even their culinary maestros; not even billionaires are beyond the scope of Sars’ compliance snipers! It is evident taxpayers are dealing with a strong, competent revenue authority, following a zero-tolerance approach to non-compliance, across the spectrum.

Bolstered by the National Prosecuting Authority, not only are Sars targeting the non-compliant HWI themselves, but casting the net wide enough to catch both the advisor and taxpayer in one fell sweep.

AI May Spell the End for Wealthy Taxpayers and Their Tax Aggressive Advisors

The reinvigorated targeting of HWIs is fuelled by Sars’ use of data driven insights, derived from both South African and international sources, to detect any degree of non-compliance and hold the perpetrating taxpayer, and in some instances, tax aggressive advisor, accountable. 

These data driven insights inform Sars of all transactional records pertaining to specific taxpayers and their tax-planners, and using AI, the “fine-tooth comb” is no longer needed to extrapolate these records into strong legal cases for non-compliance. This collaborative approach enables Sars to gain access to a comprehensive dataset, facilitating more robust evaluations of taxpayers' financial activities.

With Sars' enhanced non-compliance detection capabilities and a sharp focus on both past and future non-compliance, correct tax and legal guidance has never been more critical. The most prudent approach to be taken, is to heed Sars’ warning that non-compliance will be both hard and costly for the wealthy, with the Tax Administration Act allowing imputation of tax debt liability on delinquent advisors where they have knowingly assisted in asset dissipation to obstruct tax debt collection.

For affluent taxpayers, and their seasoned advisors, managing intricate financial portfolios, these developments signal a need for heightened diligence in tax record keeping and reporting, with Sars clear in its mandate to collect revenue and eradicate non-compliance by whatever means necessary!

Specialists to Hunt Specialists

It is self-evident from the list of advertised vacancies – the HWI Unit recruitment plan is not generic, but rather targeted and precise, detailing the need for Specialists in Legal, Audit, and Risk. 

If there was ever a shadow of a doubt, the HWI Unit are putting together their own “A-Team” to hunt tax structuring specialists, and their wealthy, but non-compliant clientele. It is then left to the AI to provide comprehensive data driven insights, assisting in deciding the fate of these tax dodgers.

This aligns perfectly with a smarter, modernised Sars, which access to 3rd party data, has already proven effective in instances such as that of Airbnb Ireland and the introduction of the Approval for International Transfer process. Always bear in mind, Sars most likely already know what you think you’re hiding.

Enhancing Voluntary Compliance Through Technology and Trust

For the wealthy of society, in order to protect yourself from starring down the barrel of the HWI Unit’s arsenal, and likely finding yourself a literal prisoner, of war, it remains the best strategy that you always ensure compliance. 

Where you find yourself on the wrong side of Sars, instead of sharing a cell with your tax aggressive advisor, there is a first mover advantage in seeking the appropriate strategic compliance guidance. This serves to both, provide you with piece of mind, and also ensures the correct protective steps are taken – call in the compliance cavalry now!

As a rule of thumb, any and all correspondence received from Sars should be legally addressed, as often legal professional privilege is a must in instances of non-compliance. This will not only serve in safeguarding against Sars implementing collection measures or potentially criminal charges, but also being specialists in their own right, taxpayers and advisors will receive correct legal counsel on the most appropriate solution to ensure full tax compliance.

Written by Jashwin Baijoo, Head of Strategic Engagement & Compliance at Tax Consulting SA