The taxman is not going anywhere this festive season

As South Africans prepare to close the year, the South African Revenue Service (SARS) is turning up the heat on tax evaders.

This is the heads-up given from Tax Consulting SA, who said that the recent search-and-seizure operation of Shauwn Mkhize and others sends a stern message: “SARS is watching, and it will act.”

“This high-profile enforcement action underscores SARS’s relentless determination to uphold the law and dismantle the culture of impunity around tax compliance,” said André Daniels, Head of Tax Controversy and Dispute Resolution, and Colleen Kaufmann, Senior Tax Attorney at Tax Consulting SA.

Daniels and Kaufmann said that preservation order and search-and-seizure warrant issued by the Durban High Court represent a significant step in SARS’s efforts to combat tax evasion and protect the fiscus’ revenue base that supports the nation.

“Whether a business mogul, a high-net-worth individual, or an average taxpayer, no one is beyond SARS’s reach,” they said

The tax experts added that the era when tax compliance was seen as optional or a “nice-to-have” is over as today’s tax environment requires full transparency, and SARS possesses the tools, determination, and authority to enforce compliance.

Why this concerns you

Daniels and Kauffman said that SARS has “unequivocally demonstrated its readiness to leverage every provision of the Tax Administration Act (TAA),” particularly the provision that empowers search-and-seizure operations.

This high-profile case is seen as being part of SARS’s broader strategy to both deter and penalise deliberate tax evasion.

“Moreover, SARS has proven its commitment to utilizing section 163 of the TAA, which authorizes the issuance of preservation orders,” said the Tax Consuling SA experts.

These orders are important for protecting assets and collecting key evidence of non-compliance to ensure that taxpayers cannot avoid their responsibilities by misusing or hiding their assets.

The experts emphasise that this is not just about high-profile individuals.

“SARS’s approach targets all non-compliant taxpayers, ensuring that the consequences of defiance are felt across the board,” said Daniels and Kauffman.

“Whether you are a business owner, entrepreneur, or salaried employee, failure to disclose income and meet tax obligations can result in severe legal and financial repercussions,” they added.

A warning to those who do not comply

SARS will “act emphatically to ensure that all meet their legal obligations,” regardless of their societal standing, said SARS Commissioner Edward Kieswetter.

The tax experts said that this should not be taken lightly. By collaborating with the Hawks, SAPS, and other agencies, SARS has fortified its capacity to investigate and prosecute tax evasion cases.

The preservation of assets and the collection of taxes will proceed “without fear, favour, or prejudice,” said Kieswetter.

They added that non-compliance is no longer just a legal risk; it is a financial and reputational disaster waiting to happen.

The bottom line

“Tax compliance is not optional—it’s a fundamental obligation that underpins South Africa’s ability to provide for its most vulnerable citizens,” said Daniels and Kauffman.

They sad that those who attempt to hide income or evade tax will face the full force of the law, as seen from the Commissioner’s statements and the recent high-profile SARS crackdowns.

“In today’s enforcement-driven environment, it’s not a matter of if SARS will catch up to you—but when,” said the Tax Consulting SA experts.

How to get all in order

For taxpayers who have fallen behind or failed to disclose income, Daniels and Kauffman said that this serves as a wake-up call.

A proactive and strategic approach, guided by experienced tax attorneys, is the best defence against SARS’s enforcement measures.

The said that tax attorneys offer several advantages, including:

• Legal Professional Privilege: This ensures that sensitive information shared with your attorney remains confidential, allowing you to explore all options without fear of exposure.
• Strategic Guidance: Navigating SARS’s processes requires expertise, particularly when dealing with audits, disputes, or enforcement actions.
• Voluntary Disclosure Programme (VDP): The VDP provides a lifeline for taxpayers to rectify their non-compliance voluntarily, avoiding harsh penalties and potential criminal prosecution. This process is most effective when approached with the assistance of skilled professionals who understand its nuances.

Read: Kissing cash goodbye in South Africa – there’s a big problem