Exam (elaborations)
LML4804 OCTOBER NOVEMBER PORTFOLIO (COMPLETE ANSWERS) Semester 2 2024 - DUE 25 October 2024
- Course
- LML4804
- Institution
- University Of South Africa
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LML4804 OCTOBER NOVEMBERPORTFOLIO (COMPLETE
ANSWERS) Semester 2 2024 - DUE 25
October 2024
, LML4804 OCTOBER NOVEMBER PORTFOLIO
(COMPLETE ANSWERS) Semester 2 2024 - DUE 25
October 2024
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 regarding the South African Revenue Service (SARS) notice
demanding information about its members, we need to consider the legal framework
established by the Tax Administration Act 28 of 2011 (TAA) and the principles of taxpayer
confidentiality and the rights of individuals.
Legal Framework
1. Tax Administration Act (TAA):
o The TAA provides SARS with broad powers to conduct audits and request
information from taxpayers. Section 46 of the TAA empowers the
Commissioner to obtain information for tax purposes, including through
lifestyle questionnaires.
o SARS’s mandate is to ensure compliance and collect revenue efficiently,
particularly from High-Net-Worth (HNW) individuals.
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