The South African Revenue Service (SARS) says that more information on more than 75 million financial accounts, covering total assets of around R160.4 trillion, is being automatically exchanged by tax bodies worldwide.
In a statement on Monday (22 November), SARS commissioner Edward Kieswetter said that the revenue collector is now sharing its data with 76 partner jurisdictions, whereas 96 partner jurisdictions have concluded their exchange obligations with South Africa.
“As business models increasingly evolve to be more digital, non-local and virtual, and physical borders are less relevant in the production and movement of goods and services, national tax bases are under constant threat of erosion,” he said.
“Working with tax administrations to improve the tax ecosystem to foster greater collaboration and co-operation is essential to leverage the benefits of tax transparency and exchange of information.”
Kieswetter said that the goal is to rebuild a smart, modern SARS with ‘unquestionable integrity’.
The key to this is augmenting the revenue collector’s human capabilities by leveraging enabling technologies and data through artificial intelligence with use of sophisticated machine learning algorithms, he said.
“As we are increasing and expanding the use of data, Exchange of Information (EOI) and Automatic Exchange of Information (AEOI) form a valuable data source that supplements our vast third-party data repository enabling the detection of taxpayers & traders who do not comply.
“Non-compliance would be hard and costly, therefore I urge taxpayers and traders to do the right thing and voluntarily comply,” he said.
Overseas assets under the spotlight
SARS has previously indicated that it will target non-compliant wealthy taxpayers with assets overseas.
In July 2021, the tax agency sent letters to 275 wealthy individuals who have financial assets abroad under the new high High Wealth Individual (HWI) Taxpayer Segment.
SARS believes that local taxpayers have assets of more than R400 billion stashed offshore. In February, it set up a separate wealth unit to focus on individual taxpayers with wealth and complex financial arrangements.
“We will be offering a differentiated service, as we do with other tax types, to the individuals with significant wealth, often derived from multiple sources other than a salary and who employ complex, and often offshore, financial arrangements,” Kieswetter said at the launch.
“We believe that statements of assets and liabilities often say more about their financial affairs than statements of income. SARS is on a journey to foster a culture of voluntary compliance. Consequently, we have been paying particular attention to taxpayers with undeclared offshore holdings to optimise compliance.”
Article written by: Businesstech
Photo credit: Fenns