SARS plans to collect taxes from individuals on a real-time monthly basis, but several practical issues need to be addressed before then, according to Joon Chong, a partner at Webber Wentzel.

SARS announced in February 2020 that it aimed to become a future revenue authority informed by data-driven insights, self-learning computers, AI, and other devices in what was termed ‘Vision 2024’, notes a Business Tech report.

Chong said through a SARS app, Vision 2024 anticipates using third-party data to make an ‘assessment’ of an individual where real-time tax liabilities will be shown, which will be valid in terms of the Tax Administration Act.

In a recent meeting with tax practitioners, Chong said SARS outlined its Vision 2024 to do away with the ‘filing season’ in 2025.

Vision 2024 envisages a data analytics environment where third-party data will be provided to SARS on a real-time monthly basis which will then be used to generate an ‘assessment’ on a SARS app.

‘It appears that the third-party data could be used by SARS to generate an “effective tax rate” for each taxpayer,’ Chong said.

The legal expert noted that through a ‘push directive’ or the IRP3e directives issued by SARS to ‘employers’, they can then require employers to withhold employees’ tax (PAYE) using the higher effective tax rate rather than, the lower calculated rate based on the actual remuneration paid by the employer.

Chong said that trust distributions and section 18A donations are not currently reported through third-party data reporting to SARS.

He noted that Vision 2024 might also require third-party data on these transactions.

There is, however, no information on how SARS will collect the tax due on business income, rental income and capital gains which are not subject to third-party data reporting.

Full Business Tech report