SARS is coming after these taxpayers hard

SARS commissioner Edward Kieswetter says that the revenue service has identified around 30,000 people not registered for tax who show economic activity exceeding R1 million a year.

He added that there are approximately 100,000 people earning over R1 million who are also not currently paying any income tax.

These individuals will become the taxman’s prime target in the year ahead as SARS looks to leverage the extra R4 billion allocated to it in the 2025 budget.

Speaking at the News24 post-budget wrap on Thursday (13 March), Kieswetter said that South Africa currently has about R800 billion in tax revenue that is ‘unrecovered’.

This is from unpaid tax debts, overdue tax returns and uncollected tax inventory. This amount has been growing each year as unrecovered taxes don’t expire.

However, SARS has been struggling to keep up with these collections due to underfunding and the sheer scale of all the data it has to sift through.

Ahead of the original budget in February, Kieswetter posited that giving more budget to SARS would enable the state to boost collections and revenue.

In the revised March budget, Finance Minister Enoch Godongwana is now putting his money on Kieswetter and SARS to accomplish exactly that.

Robin Galloway, senior manager at Forvis Mazars South Africa, noted that SARS should have an annual budget of approximately R18 billion.

In 2024, it was allocated just R12.4 billion, leaving a funding gap of R5.6 billion, or over 30%.

Now, in addition to the R3.5 billion that was allocated to SARS in the 2024 Mid Term Budget Speech (MTBPS), to modernise its operations and enhance taxpayer services, the 2025 National Budget allocated an additional R4 billion to SARS over the next three years, resulting in a total allocation of R7.5 billion.

The billions invested into SARS’ modernisation programme have allowed it to essentially shift to a near real-time collection of employee tax and VAT.

The investment has also allowed the group to radically improve its automated systems, with auto-assessments proving to be highly effective.

In the 2024/25 filing season, SARS introduced auto-assessments for non-provisional taxpayers, resulting in 4,765,753 individuals being assessed automatically—a 24.94% increase from the previous year.

This has streamlined the tax filing process, making it more efficient for taxpayers and the revenue service alike

SARS chasing new targets

Kieswetter said the new funding will help SARS push its investments further, allowing it to better sift through over 16 petabytes of data—or “fifteen times the Netflix library”—it has on hand.

The group has invested heavily in AI and machine learning to assist with this processes, which Kieswetter has already yielded results.

He highlighted that around 156,000 individuals have been identified in the system that should be filing tax returns.

SARS’ records show that these individuals were at some stage below the threshold and did not need to submit, but their economic activity now suggests otherwise.

He said that there is also evidence in the data that some 30,000 individual taxpayers are showing economic activity of over R1 million a year but are not registered for tax on their system.

THe SARS commissioner estimated about 100,000 taxpayers who earn over R1 million a year who are not paying their dues and need to be tracked down.

He said it is in the best interests of the country to “deal with those who are hiding their money, masking their economic activities”.