The South African Revenue Service has introduced a new initiative for High Wealth Individuals (HWI) by sending out to each of these taxpayers an introduction note to their "Dedicated Relationship Managers". 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. 

While the introduction of a dedicated manager appears to offer numerous benefits; the rationale, benefits and consequences hereof is not clear. The specialised attention from SARS confirms that high-net-worth individuals are under closer scrutiny. The HWI Unit has stated that they are not only about offering support but also ensuring that compliance standards are met to the highest degree.

We have seen increased attention from SARS and which often in-depth reviews of their tax filings and financial activities. It’s essential to maintain transparency and accuracy in all tax-related matters, as any discrepancies or non-compliance could result in significant penalties or further investigation. One item our practice often sees that taxpayers get wrong, including lesser experienced tax practitioners and accounts, is the statement of assets and liabilities. This goes to the heart of tax compliance and once disclosed is a permanent record that SARS can reconcile against. Especially with the 3rd party data which SARS now receives, any information mismatch triggers automatic attention as SARS is obligated to ask the obvious questions.

While the dedicated manager can assist with inquiries and provide clarity, taxpayers should continue to be diligent in their tax planning and reporting. The personalized service is a double-edged sword; while it offers direct assistance, it also signals that SARS is keeping a closer watch on high-net-worth individuals to ensure full compliance with tax laws. We have also seen that relationship managers are often without real influence and the moment a matter gets complex; they cannot really cause a matter to be better resolved than the formal processes.

In summary, while the new service from SARS offers convenience and support, taxpayers should approach it with caution, ensuring that they maintain strict adherence to all tax obligations. The relationship manager is there to help, but the onus remains on the taxpayer to ensure their tax affairs are in order and above reproach.

Submitted by Tax Consulting SA