,DO NOT FORGET TO LEAVE A REVIEW.EVERY REVIEW MATTERS.
QUESTION 1 (TAX ADMINISTRATION AND TAX
AVOIDANCE) The Tax Administration Act 28 of 2011
(TAA) empowers the Commissioner for the South African
Revenue Service (the Commissioner) to conduct audits on
taxpayers. The Commissioner has, over the years,
announced that the South African Revenue Service
(SARS) will conduct audits on all taxpayers that enjoy a
certain lifestyle. Most recently, the Commissioner
announced that taxpayers who buy certain premium-brand
goods would be subjected to audits. In doing so, SARS is
upholding its commitment to keep a close eye on the so-
called High-Net-Worth (HNW) taxpayers. A HNW taxpayer
is defined as a person whose estate is worth more than
R50 million. Following the above statement, SARS
announces in the press that it will be conducting lifestyle
questionnaires on all wealthy taxpayers who are members
of the Vintage Club. The Vintage Club receives a notice
from SARS demanding information about the names and
personal details of its members. WHAT IS REQUIRED OF
YOU: The club approaches you for advice regarding
SARS’ notice. Advise the club in terms of the existing law.
[15] SUB-TOTAL FOR QUESTION 1 [15 marks]
, To advise the Vintage Club on SARS' notice, we
need to understand the applicable provisions of the
Tax Administration Act (TAA) 28 of 2011 and the
rights and obligations of taxpayers in relation to
SARS audits and information requests.
1. SARS' Authority Under the Tax
Administration Act
The Tax Administration Act grants SARS broad
powers to request information and conduct audits to
ensure compliance with tax laws. Sections 46 and 47
of the TAA are particularly relevant:
Section 46: This section allows SARS to request
relevant information, documents, or things from
any person, including a third party, if it is
required to administer a tax Act. This could
include lifestyle questionnaires and information
about Vintage Club members, provided SARS
can demonstrate the relevance of the information
to its tax administration objectives.
Section 47: This section permits SARS to
conduct an audit or criminal investigation,
including the use of information-gathering
QUESTION 1 (TAX ADMINISTRATION AND TAX
AVOIDANCE) The Tax Administration Act 28 of 2011
(TAA) empowers the Commissioner for the South African
Revenue Service (the Commissioner) to conduct audits on
taxpayers. The Commissioner has, over the years,
announced that the South African Revenue Service
(SARS) will conduct audits on all taxpayers that enjoy a
certain lifestyle. Most recently, the Commissioner
announced that taxpayers who buy certain premium-brand
goods would be subjected to audits. In doing so, SARS is
upholding its commitment to keep a close eye on the so-
called High-Net-Worth (HNW) taxpayers. A HNW taxpayer
is defined as a person whose estate is worth more than
R50 million. Following the above statement, SARS
announces in the press that it will be conducting lifestyle
questionnaires on all wealthy taxpayers who are members
of the Vintage Club. The Vintage Club receives a notice
from SARS demanding information about the names and
personal details of its members. WHAT IS REQUIRED OF
YOU: The club approaches you for advice regarding
SARS’ notice. Advise the club in terms of the existing law.
[15] SUB-TOTAL FOR QUESTION 1 [15 marks]
, To advise the Vintage Club on SARS' notice, we
need to understand the applicable provisions of the
Tax Administration Act (TAA) 28 of 2011 and the
rights and obligations of taxpayers in relation to
SARS audits and information requests.
1. SARS' Authority Under the Tax
Administration Act
The Tax Administration Act grants SARS broad
powers to request information and conduct audits to
ensure compliance with tax laws. Sections 46 and 47
of the TAA are particularly relevant:
Section 46: This section allows SARS to request
relevant information, documents, or things from
any person, including a third party, if it is
required to administer a tax Act. This could
include lifestyle questionnaires and information
about Vintage Club members, provided SARS
can demonstrate the relevance of the information
to its tax administration objectives.
Section 47: This section permits SARS to
conduct an audit or criminal investigation,
including the use of information-gathering
