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Calls for lifestyle audits on rich South Africans

Calls for lifestyle audits on rich South Africans

Villet Overstrand (Pty) Ltd

Calls for lifestyle audits on rich South Africans living in mansions and driving expensive cars

The South African Revenue Service (SARS) should ramp up lifestyle audits for wealthy South African, says the chairperson of the Tax Review Committee Judge Dennis Davis.

In an interview with 702, Davis said that the revenue collector currently faces a shortfall of between R50 billion and R100 billion a year.

He said that the tax tables show that only around 5,000 - 6,000 South Africans report taxable income of more than R5 million, and that lifestyle audits on wealthy individuals could help make up this shortfall.

“Drive around Clifton, Camps Bay, Bishop’s Court, Bryanston and Sandton and count how many houses there are that have to have that level of income for the upkeep.

“That is apart from all of the luxury motor cars you see on our roads. So if you take R5 million (as the top bracket), there are a lot of rich people who probably have a lot more than that and are not disclosing it.”

Davis said that authorities could approach Natis, which is responsible for maintaining and registry of cars in the country, and find out who owns all of these cars and perform a tax audit on them.

“If you have a R3 million Ferrari and are reporting R100,000 in taxable income, I think the revenue authority is entitled to knock on your door and ask you to explain,” he said.

Davis said that while SARS is being improved under the leadership of Edward Kieswetter, he noted that the capabilities revenue service were ‘completely and utterly destroyed’ under previous mismanagement.

“(This year) I am hopeful we will get some of these ‘low-hanging fruit’ back into the tax net”. Davis said that he was currently working with SARS to recapacitate auditors and help target individuals through lifestyle audits.

 
Rich South Africans

Data published at the start of January by New World Wealth and AfrAsia Bank shows that South Africa is currently home to 35,000 high net worth individuals (HNWIs).

HNWIs are defined as dollar millionaires or people with a net worth of $1 million (R15.48 million) or more.

In December 2019, New World Wealth reported that there were approximately 38,400 dollar millionaires living in the country – down by 800 from the number recorded for 2018, when there were 39,200 millionaires recorded.

The 2018 figure was down significantly - a loss of 4,400 millionaires - from the year before that (2017), showing a continued trend of money leaving South Africa, either through emigration, or destruction of wealth through the weak economy.

Overall, between 2017 and 2020 South Africa lost 8,600 millionaires.

Source: businesstech.co.za

Calls for lifestyle audits on rich South Africans

Villet Overstrand (Pty) Ltd

Villet Overstrand (Pty) Ltd is a branch of one of the leading accounting firms in the Overberg and offers businesses and individuals a host of accounting services that can be tailored to each client’s specific needs. These services include but are not limited to advisory, accounting, taxation and ...

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