'We don't want fewer people paying more taxes, but more people paying less tax'

49 days ago

A special tax unit targeting wealthy individuals is now up and running.

The South African Revenue Service (Sars) announced in February that it would be increasing its focus on taxpayers "with wealth and complex financial arrangements".

The unit is called the High Wealth Individual Taxpayer Segment (HWI).

RELATED: Invested offshore to dodge the taxman? Sars is coming for you

It features dedicated relationship managers to oversee the tax authority's dealings with South Africa's super-rich.

Bruce Whitfield interviews Sars Commissioner Edward Kieswetter.

Kieswetter says the way the unit works is not unique - it's in line with international best practice (IBP).

Ultimately, the relationship is between the Sars-appointed officials and the taxpayers themselves, notwithstanding advisers they may already use.

At international level, tax authorities would create the capacity to deal with large businesses, international business, and also dedicated capacity to deal with wealthy individuals... It's also supported by the behavioural science that informs how people, especially wealthy people, behave with their money.

Edward Kieswetter, Commissioner - Sars

We will have this relationship directly with the taxpayer but we will often speak to their advisers, whoever they use as an intermediary on their behalf and they would be fully mandated to do so.

Edward Kieswetter, Commissioner - Sars

Kieswetter acknowledges that many South Africans feel cynical about the way their tax money is (mis)spent, some using this as justification for withholding their taxes.

Sars has to work hard at changing that perception to the extent that it may be true, he says.

Remember, Sars has no intent of collecting any cents that are not due in terms of the legal mandate. So those aren't the taxpayers we are going after.

Edward Kieswetter, Commissioner - Sars

For honest taxpayers who are fully compliant... we, in fact, want to make it easier for you. We want to make this burden of paying and fulfilling your tax duties to just go away, to be an event that happens almost seamlessly!

Edward Kieswetter, Commissioner - Sars

Our focus will always be on those taxpayers who seek to mask the true nature of their income and expenses and they do so exclusively to avoid and, at times, even evade paying taxes.

Edward Kieswetter, Commissioner - Sars

It is not about extracting more money. In fact, if we get it right... the result should not be fewer people paying more taxes, but more people paying less tax.

Edward Kieswetter, Commissioner - Sars

Listen to the conversation with the Sars Commissioner on The Money Show:

This article first appeared on CapeTalk : 'We don't want fewer people paying more taxes, but more people paying less tax'

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