When it comes to declaring assets and liabilities SARS will verify your information in one of these five ways
Capital Reconciliation is a process that helps SARS determine how you use the funds at your disposal during a certain period by taking into account all your income (taxable and non-taxable) and your expenditure (deductible and non-deductible).
You can't hide your assets from SARS. SARS has different means of gathering information.
#1: Fixed property: The deeds office is easily accessible by SARS. This enables it to gather information of each sale or purchase relating to any property.
#2: Motor vehicles: SARS can get records from licensing authorities of all the cars you register in your name. SARS staff members also record the number plates of luxury vehicles they spot on the road and trace them to the owner's tax file.
What's more… SARS can easily trace boats, caravans, etc. back to your tax file. When you buy a car you also need to give your tax number. This makes it easy for SARS to find your info.
Attention Finance and Payroll managers
Do you know:
#3: Newspapers and magazines: The media provides a wealth of information. SARS can compare high profile socialising, luxury show houses, financially based court cases and other articles to income declared in your tax returns.
#4: Tip-offs: 'SARS has an anti-corruption line and a website link that promises confidentiality to disgruntled employees, jilted lovers, ex-spouses and anyone else who wants to snitch on someone,' warns the Practical Tax Loose Leaf Service. So people close to you can easily become a great source of info to SARS.
#5: The Nits system: The SARS computer system is apparently linked to certain licensing authorities, the Registrar of Companies and the interest payment schedules from banks and unit trusts (the annual IT3B lists). This means they can find your info at a click of a button.
The bottom line is you must never lie to SARS. It has various ways to get your information and you'll pay a heavy price for being dishonest.