Are You Prepared for a Tax Audit?
Protect Yourself with Tax Risk Insurance
Tax audits in South Africa are on the rise. The South African Revenue Services (SARS) is using Artificial Intelligence (AI) and more stringent compliance measures to address discrepancies and collect outstanding taxes. With increased funding from National Treasury, experts estimate that up to 25% of tax returns could be audited[1] – so it’s no longer ‘if’ you or your business will be audited, but ‘when’.
“Audits are becoming more frequent and more complex and can take up to a year to be completed[2],” says Kiki van Rooyen, from Aon South Africa, an insurance brokerage and risk advisor. “Responding to a SARS audit can be time-consuming and incredibly costly. You’ll likely need accountants, tax specialists and even legal experts – costs most individuals and small businesses aren’t financially prepared for.”
Even if your taxes are accurate and up to date, it’s still possible to be selected for a SARS audit – sometimes at random, or due to discrepancies that may arise. While many people work with trusted accountants, navigating a complex audit or reassessment can call for more specialised expertise. Tax legislation is constantly evolving, and in certain cases, legal representation may be required – something outside the usual scope of an accountant’s role. Having access to the right professionals not only helps ensure compliance, but also gives you added confidence that your rights as a taxpayer are fully understood and protected.
“To help mitigate these risks, Aon offers Tax Risk Insurance suited to individuals, trusts and small to medium-sized enterprises (SMMEs) – anyone who could be impacted by a tax audit but may not have in-house resources to manage the process. Whether it’s an income tax, VAT, capital gains or employee tax audit, or if you’re facing a dispute resolution hearing or appeal, this insurance steps in to support and cover the costs,” Kiki explains.
“This solution covers the professional costs involved in managing a SARS audit or dispute, including your accountant’s fees. It gives you access to some of the country’s top tax professionals – ensuring a fair outcome and protecting you from the financial strain of a lengthy audit or legal battle,” she adds.
“Once your cover is activated, it applies regardless of how far back SARS decides to assess your records. You’re also able to make multiple claims per year should the need arise. Importantly, it gives you certainty – replacing the stress of unexpected audit costs with the assurance that a skilled team will have your back,” says Kiki.
“With this solution, you get professional support and timely protection that ensures fair treatment and peace of mind in an increasingly audit-driven tax environment,” Kiki concludes.
