SARS is increasingly focusing their sights on provisional taxpayers, who are often high-wealth individuals (HWI) with complex, multi-layered investments both locally and offshore. These HWI provisional taxpayers are facing detailed requests for documentation ranging from income and forecast deductions for the next six months. Added to this SARS is using advanced AI technology to streamline audits and improve efficiency.
AI algorithms take over from manpower.
Instead of relying on humans, SARS is using cutting-edge AI algorithms to target all taxpayers. These AI algorithms are being used to maintain thoroughness and accuracy and deliver data-driven insights almost instantaneously and will be used to revolutionise the way tax compliance is enforced.
Data delivers the full picture
According to SARS commissioner Edward Kieswetter the “use of AI and proactive measures have resulted in the recovery of R210-billion for the first 11 months of the current tax year.”1
Data is being used to deliver a comprehensive picture of provisional taxpayer’s financial activities and datasets are being used to gauge whether a taxpayer is living beyond their disclosed financial means. Advanced algorithms quickly identify a pattern of tax evasion and highlight probable deceptive returns with great accuracy. High-speed cross-referencing abilities mean that SARS can quickly and efficiently uncover if taxpayers mistakenly (or deliberately) hide details like shareholding on their tax submissions.
While the pressure is intensifying on all taxpayers, SARS has appointed a dedicated SARS Relationship manager to investigate the affairs of HWIs on a regular basis. As a result, HWIs can anticipate heightened scrutiny and requests for detailed information regarding their provisional taxes.
Meticulous record keeping is essential
As the filing season approaches, and with SARS’s enhanced focus on compliance and verification, it’s essential HWIs demonstrate meticulous record keeping and have the knowledge to navigate evolving tax regulations. If a taxpayer finds themselves in a position where they are now being forced to disclose previous undeclared interests or foreign income, it is advisable to seek the assistance of tax professionals to ensure that the best strategy for compliance is followed.
Submit your provisional tax return with confidence
With SARS’s advanced technology, provisional taxpayers need to educate themselves on how SARS’s new technology can expose possible negligence. They also need to be completely transparent in their declarations and deductions.
For expert assistance with the submission of your tax returns, speak to our professional tax team today.