Edward Kieswetter is coming after these taxpayers in South Africa

The South African Revenue Service (SARS) says it is owed a “theoretical” R800 billion, with R500 billion of that within the taxman’s reach.

SARS Commissioner Edward Kieswetter quoted the figure before and after the shelved 2025 Budget in February, saying that a strengthened SARS could resolve many of the government’s funding issues.

This led to Finance Minister Enoch Godongwana relenting and giving SARS an additional R3.5 billion in the revised March 2025 Budget to help it improve collections.

Several experts—commenting on the R800 billion figure—noted that it is unlikely that the taxman could collect this amount, with some doubts around the plausibility of the number.

However, on Friday, SARS presented its response on the 2025 Budget to parliament’s finance cluster, laying out exactly where it gets these numbers.

According to the taxman, South Africa has a total “true” tax liability of around R2.5 trillion.

Total taxes paid amount to about R1.5 trillion, leaving R1 trillion unaccounted for.

SARS said that about R200 billion of this is being handled through its compliance programmes, leaving R800 billion “under-recovered”.

The Revenue Service conceded that not all of this is directly taxable, with various amounts tied to disputed and undisputed outstanding debts, litigation and settlements.

However, in the ‘tax gap’ assessment conducted, between R320 billion and R500 billion is theoretically taxable and collectable.

Breaking it down even further, an assessment of 2022 tax data showed that approximately R78.5 billion remained uncollected from corporates (CIT), R200 billion from income taxpayers (PIT) and R200 billion from VAT.

The group noted that as much as R18 billion is owed in excise on tobacco. This puts the total potential tax collection at R500 billion.

Where SARS is hunting for money

Having a theoretical pool of uncollected tax is all good, but the Revenue Service would still have to spend a great deal of resources tracking it down.

To this end, the group intends to intensify its compliance efforts by focusing on specific areas, like finding new tax bases and clamping down on fraud and tax evasion.

SARS highlighted these areas where it believes it can boost tax revenue:

• Broadening the tax base in the formal and informal economy
• International Taxes, focusing on Base Erosion and Profit Shifting, and Digitalisation
• Trade-based Based Money Laundering & Illicit Financial Flows, particularly related to Tobacco, Fuel and Gold
• Trade Mispricing and Undervaluation Fraud
• E-commerce, focusing on small parcels (like Temu and Shein)
• High Wealth Individuals
• Cryptocurrency
• Syndicated Tax and Customs Crimes (incl. VAT Fraud and other tax crimes)

It has already established dedicated units for some of these, such as the HWI and crypto units.

However, SARS also wants to focus its hunt on specific sectors, having flagged the eight most non-compliant taxpayers in the country. These include:

1. Mining and Quarrying (VAT, PAYE, and CIT);
2. Construction: Bricks, Ceramics, Glass, Cement and similar (VAT, PAYE, CIT);
3. Transport Storage and Communications (VAT, PAYE, self-employed individuals)
4. Agencies and Other services (VAT, CIT and self-employed individuals);
5. Agriculture, Forestry and Fishing (VAT, PAYE and CIT);
6. Clothing and Footwear (VAT, PAYE and CIT);
7. Personal and Household services (VAT, PAYE, CIT);
8. Transport Equipment (VAT, PAYE, CIT)

Echoing Kieswetter’s statements following the budget, the revenue service also flagged its renewed focus on individual taxpayers, particularly those who have been flagged as not needing to file taxes but exhibit wealth.

The group reiterated that its systems flagged 115,506 taxpayers who are showing “substantial economic activity” such as assets, bank flows, etc, who are not filing taxes.

It has launched 54,800 audit cases, with assessments to the value of R5.56 billion, for these individuals. So far, R1.36 billion has been collected.

SARS has also flagged 36,000 individuals not registered for tax, with an estimated R30 billion in assessment value.

14,000 have since been registered, and R140 million collected, but this is being disputed by the taxpayers in question.

SARS stressed that resource constraints limit the progress of these projects, which is why more funding is needed.