About 40 000 taxpayers continue to mislead the South African Revenue Service (Sars) about their income from investments, leading to a loss of R1,2-billion a year in potential revenue from taxes. But the department is about to crack down on them.
This week the Receiver of Revenue will begin to contact these 40 000 high earners of interest, whom Sars says are under-declaring their incomes. Sars officials this week told the Mail & Guardian they had learnt this after comparing what people declare as their interest income with their bank accounts and other financial transactions.
Interest income is money earned from investments in fixed deposits, credit cards, broker accounts and so on.
Sars analyst Yolisa Pikie said that over the years Sars had a sense that people were not fully declaring interest they earned from their investments.
“Our suspicions were confirmed when, last year, we investigated, on a small scale, with a smaller sample of people, and found that we lost about R300-million from a core group of about 9 000 people. We felt this was quite strange and realised there was a problem because our margin of error was only 5,9%.
“We then did a rerun of the exercise for the year 2001/02. We found 200 000 people who could be under-declaring, but about 40 000 people accounted for R1-billion under-declared. And these are just individuals. We are not talking yet of close corporations, trusts and companies.
“From this week we are going after these individuals. The campaign starts with us writing them a letter and then phoning, asking them to come forward.”