Edward Kieswetter’s hit list

Tax experts have highlighted that SARS’ compliance radar is focused on both High-Wealth Individuals (HWIs) and taxpayers engaging in cryptocurrency-related transactions for the next fiscal year.

Tax Consulting SA highlighted that these two groups have again emerged as a “recurring collection windfall” for SARS and will be central to its compliance themes for maximising revenue collection. 

The taxman’s intensified focus on HWIs is no surprise. The tax experts noted that these individuals accrue wealth through complex, multi-layered investment structures.

This includes investments made both locally and offshore, making their tax affairs far more intricate than those of the average taxpayer. 

According to Tax Consulting SA, SARS is countering these complexities by investing heavily in automation and data-driven insights, enhancing its efficiency and accuracy in detecting non-compliance. 

“The revenue authority has also assigned dedicated relationship managers to wealthy taxpayers, ensuring closer oversight of their tax matters,” said the consultancy firm.

This focus area is already paying off. SARS reported that revenue collection from HWIs reached R11.76 billion last year alone. 

“If you think SARS is willing to let that number diminish, you would be sorely mistaken,” Tax Consulting SA warned. 

Through enhanced surveillance, data-sharing agreements with foreign jurisdictions, and cutting-edge processing technologies, SARS can now detect offshore assets with greater precision, ensuring full and accurate declarations.

Statistics from the National Treasury show that 569,351 South Africans are expected to earn over R1 million per annum in the 2025/26 financial year—a 16% increase from the previous year. 

However, SARS believes the actual number is even higher. Commissioner Edward Kieswetter has estimated that around 100,000 individuals earning over R1 million are not registered for income tax at all. 

Tax Consulting SA noted that with such high numbers at stake, SARS’ intensified monitoring of HWIs is not just strategic but necessary to maintain and grow its revenue base.

SARS’ latest target

Alongside the wealthy, SARS is also casting its net over those who deal in cryptocurrency. With crypto asset transactions now a central part of its “Tax Gap Themes”. 

“In a broader context, this move aligns with global trends aimed at promoting tax transparency across digital and crypto asset markets,” Tax Consulting SA explained.

Although comprehensive guidance from SARS on crypto taxation remains pending, the revenue authority has made it clear that it will not tolerate non-disclosure. 

Taxpayers must report crypto profits as either capital or revenue, depending on the nature of the transaction — a determination that is crucial for fulfilling tax obligations accurately. 

In the absence of clear-cut domestic legislation on crypto, many investors find themselves navigating a grey area, but SARS has consistently warned that ignorance will not shield them from consequences.

To bolster compliance, SARS is collaborating with crypto exchanges to monitor transactions and share information. 

It is also deploying artificial intelligence, machine learning, and sophisticated algorithms to enhance its enforcement capabilities. 

“The onus remains on taxpayers to disclose their earnings accurately, with SARS ready to pursue those who neglect their reporting obligations,” Tax Consulting SA said.

The consultancy firm added that SARS’ commitment to closing compliance gaps is further demonstrated through its lifestyle audits, with 236 conducted in the past fiscal year alone. 

These audits assess whether a taxpayer’s lifestyle matches their declared income and are now more efficient thanks to the agency’s reliance on data-driven insights. 

According to Tax Consulting SA, this modernisation means that “gauging if a taxpayer is living beyond their means is now that much less onerous on the revenue authority.”

It added that SARS’ approach is proactive, beginning each compliance initiative with the end in mind—full disclosure of all interests, whether they exist in South Africa, offshore, or even in the Metaverse. 

“The best practice is to seek the assistance of a tax professional, ensuring the best compliance strategy is followed,” the firm said.