SARS collects more than R2trillion and targets wealthy
SARS Commissioner briefed the media this week on its tax collection efforts for the fiscal year ending March 2023/24.. More than R 2 trillion was collected which is a new record.
SARS's recent clampdown on tax evasion and underreporting has targeted several groups of taxpayers. SARS's High Wealth Individuals Unit, established in 2021, currently manages 4,000 taxpayers. Commissioner Kieswetter indicates plans to migrate an additional 58,000 taxpayers and their entities to this unit eventually.
The Commissioner provided a list of these groups, and the effect on tax collection:
1. High-Wealth Individuals:
Tax collection from this group increased by more than 10% over the past year, amounting to R12.5 billion. Lifestyle and luxury vehicle audits alone contributed R850 million, while a crackdown on underpaid provisional taxes brought in an additional R190 million.
2. Professional firms
14 partners at a law firm were found to have underestimated their provisional taxes.
This action is part of SARS's broader initiative to target underreporting among professionals, although specific figures from this crackdown were not disclosed.
53 tax practitioners were found to be noncompliant with their own taxes. Licences of eight tax practitioners have been revoked, with some identified for further criminal investigations.
4. Nonprofit Organizations (Public Benefit Organizations):
Nonprofit organizations, trusts, and companies are being scrutinized for potential abuse and low compliance, including their use as vehicles for money laundering and tax crime.
SARS disallowed R1 billion of impermissible claims presented as donations over the past year. Tax revenue from these organizations increased by almost 9% to R16.5 billion.
5. Foreign Investment Allowance Applicants:
High-wealth individuals applying to move money overseas as part of their foreign investment allowances are subjected to risk reviews to ensure compliance.
The group has applied to move R13.6 billion overseas, down from R17 billion the previous year. Some R7 billion was approved, indicating a tighter control and possibly higher compliance rates.