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- Some 58 000 wealthy taxpayers will still be migrated to SARS's High Wealth Individuals Unit.
- Tax collected from the group increased by more than 10% over the past year.
- SARS Commissioner Edward Kieswetter says that at one law firm in Sandton, 14 of its partners were found to have underestimated their own provisional taxes.
- For more financial news, go to the News24 Business front page.
The South African Revenue Service (SARS) continues to keep the wealthy in its crosshairs, with its focus also intensifying on nonprofit organisations.
Tax earned from wealthy individuals increased by more than 10% over the past year, rising to R12.5 billion. From 85 lifestyle and luxury vehicle audits alone, SARS collected R850 million. Another R190 million came from high-wealth taxpayers who underpaid their provisional taxes.
At a briefing in Pretoria on Tuesday, SARS Commissioner Edward Kieswetter said that at one law firm in Sandton, 14 of its partners were found to have underestimated their own provisional taxes.
READ | As SARS crackdowns intensify, SA's tax take surprises on upside
Some 4 000 taxpayers are now managed by SARS's High Wealth Individuals Unit, which was established in 2021. Kieswetter says that another 58 000 taxpayers and their related entities will be migrated to the unit over time.
Over the past year, as part of their foreign investment allowances, this group has applied to move R13.6 billion overseas – which is down from R17 billion in the previous year. Some R7 billion was approved over the past year.
Kieswetter said taxpayers must ensure that their affairs are in order before they apply, "because your application will trigger a risk review".
SARS identified 53 tax practitioners who are noncompliant in their own taxes, and has applied to have their licences revoked. Eight tax practitioners have already been stripped of their professional licences and some of them have been identified for further criminal investigations, said Kieswetter.
"We've stepped up our vigilance when receiving approval requests for international transfer via practitioners, and many of these have resulted in full audits," Kieswetter said. In future, SARS will place a lot more focus on firms that promote certain schemes, he added.
He emphasised that SARS is also increasing its focus on SA's 64 000 tax-exempt institutions, particularly public benefit organisations, which include nonprofit organisations, trusts and companies.
"The level of abuse and low compliance in this area remain a huge concern, including [them] being used as vehicles for money laundering and tax crime," said Kieswetter, highlighting that this was one of the areas South Africa must address in order to be removed from the Financial Action Task Force's (FATF) grey list. The FATF is an intergovernmental body that sets global standards to combat money laundering and terrorist financing,
SARS has stepped up its risk detection of nonprofit organisations and disallowed R1 billion of impermissible claims, presented as donations, over the past year. Additional reporting information is also now required as part of regulatory changes. Over the past year, tax revenue from these organisations increased by almost 9% to R16.5 billion.
Kieswetter says the relationship between SARS and law enforcement agencies has significantly improved, which allows the sharing of data and other collaboration.
But he says that more needs to be done, and that the whole government needs to be involved in combatting fraud and crime, to ensure that South Africa is removed from the grey list.
"Fingers point to corrupt public officials as well as professional enablers," Kieswetter said.
"We are dependent on our sister agencies such as the Hawks and the NPA to bring this matter to court and to ensure the successful prosecution of all involved. Ultimately, we want to see more successful prosecutions with custodial sentences.
"People must wear orange overalls."
Kieswetter was speaking at a briefing about the SARS revenue collection for 2023/24. For the fiscal year to end-March, it reported gross tax of R2.155 trillion – a new record and R10 billion more than Treasury's last estimate in February.
