{"id":590,"date":"2021-01-14T10:43:12","date_gmt":"2021-01-14T10:43:12","guid":{"rendered":"https:\/\/www.innov8fs.co.za\/blog\/?p=590"},"modified":"2026-03-18T11:46:46","modified_gmt":"2026-03-18T11:46:46","slug":"sars-to-conduct-lifestyle-audits-in-bid-to-recover-billions","status":"publish","type":"post","link":"https:\/\/www.innov8fs.co.za\/blog\/2021\/01\/14\/sars-to-conduct-lifestyle-audits-in-bid-to-recover-billions\/","title":{"rendered":"SARS to conduct lifestyle audits in bid to recover billions"},"content":{"rendered":"

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Several South Africans will be subjected to lifestyle audits by the South African Revenue Service as it implements measures to recover shortfalls in tax collections.<\/p>\n

On Monday 11 January, Judge Dennis Davis, who heads up the Tax Review Committee, spoke about measures the tax collecting authority would implement to address this issue.<\/p>\n

Davis told Bruce Whitfield on\u00a0702\u2019s\u00a0Money Show<\/em>\u00a0that lifestyle audits of the country\u2019s wealthy would be used as a means to collect the under-recovery in taxes the government faced every year. He referred to lifestyle audits as \u201clow-hanging fruits\u201d \u2014 simple and effective ways for SARS to force tax dodgers to pay up.<\/p>\n

LARGE NUMBER OF TAX DODGERS<\/strong><\/h2>\n

Davis believes numerous South Africans do not accurately disclose their net worth in order to avoid high tax submissions to SARS. He said the actual number of South Africans reflecting taxable incomes of more than R5 million a year was unrealistic.<\/p>\n

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\u201cThere are only about 5,000 to 6,000 people who reflect taxable income of more than R5m\u2026 Drive around Clifton, Camps Bay, Bishopscourt, Bryanston, Sandton\u2026 How many people have to have that level of income for the upkeep?<\/p><\/blockquote>\n

There are a lot of rich people around who aren\u2019t disclosing,\u201d Davis said in the interview on 702.<\/p>\n

LUXURY VEHICLES ALSO NOT BEING DISCLOSED<\/strong><\/h2>\n

Davis also said the values of luxury vehicles were not being disclosed by certain individuals.<\/p>\n

\u201cIf you have a R3m 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,\u201d he said.<\/p><\/blockquote>\n

He believes individuals with luxury vehicles and those who own homes in the country\u2019s premium suburbs should be subjected to lifestyle audits as a means to encourage compliance and rectify under-collection of tax revenue.<\/p>\n

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\u201cThat is apart from all of the luxury motor cars you see on our roads. So, if you take R5m [as the top bracket], there are a lot of rich people who probably have a lot more than that and are not disclosing it,\u201d\u00a0Davis said.<\/p>\n

HIGH NET WORTH INDIVIDUALS IN SOUTH AFRICA<\/strong><\/h2>\n

High Net Worth Individuals (HNWIs) are defined as US dollar millionaires or people with a net worth of $1 million (R15.27 million).<\/p>\n

The New World Wealth and AfrAsia Bank published data in early January showing the number of South Africans who are classified as high net worth individuals (HNWIs). According to this data, there are 35,000\u00a0HNWIs in the country.<\/p>\n

SARS PREPARES FOR LIFESTYLE AUDITS<\/strong><\/h2>\n

The coronavirus pandemic and extended lockdowns have added financial pressure on individuals and many businesses. South Africa is short of R300bn in revenue this year.<\/p>\n

\u201cI am hopeful we will get some of these low-hanging fruit back into the tax net,\u201d Davis said.<\/p><\/blockquote>\n

A shake-up of individuals dodging the taxman is imminent. Davis said he was working with SARS to prepare its auditors to start carrying out lifestyle audits on individuals who were not disclosing accurately.<\/p>\n

\u201cOnce we start this process the word will get around. People will knock on the door of SARS,\u201d Davis added.<\/p>\n","protected":false},"excerpt":{"rendered":"

Several South Africans will be subjected to lifestyle audits by the South African Revenue Service as it implements measures to recover shortfalls in tax collections.…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-590","post","type-post","status-publish","format-standard","hentry","category-innov8ions"],"_links":{"self":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts\/590","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/comments?post=590"}],"version-history":[{"count":1,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts\/590\/revisions"}],"predecessor-version":[{"id":592,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts\/590\/revisions\/592"}],"wp:attachment":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/media?parent=590"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/categories?post=590"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/tags?post=590"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}