SARS going after South Africans who buy these two things

The South African Revenue Service (SARS) has noted that luxury vehicles and properties are used to mask additional financial flows and warned that these purchases will be a focus area in the upcoming financial year.  

This was the message from the SARS Commissioner Edward Kieswetter during the taxman’s revenue announcement presentation last month. 

Kieswetter confirmed that SARS hit a record high of R2.303 trillion in gross revenue collection at the end of March 2025.

He added that it also increased refunds for the year, paying out R448 billion to taxpayers—the highest-ever amount and up 8.2% from the R414 billion paid out last year.

This brings the collected net amount to R1.855 trillion, which is R8.8 billion higher than the revised estimate in the 2025 Budget and R114.0 billion more than last year’s R1.741 trillion.

The commissioner said this shows efforts to combat non-compliance are working, and the taxman will keep using tools that have proven effective in identifying tax evaders.

This includes monitoring South Africans’ bank accounts, which SARS has used to identify taxpayers whose lifestyles don’t match their tax contributions.

On this point, Kieswetter reaffirmed the revenue service’s strong focus on high-net-worth individuals (HNWIs) in South Africa.

He warned that displays of wealth, such as luxury cars and high-value properties, are being flagged and subjected to deeper scrutiny. 

According to Kieswetter, SARS is committed to “achieving voluntary compliance” in this complex segment.

However, it’s also deploying what he called robust case management and targeted enforcement measures to uphold fiscal equity.

Efforts are being made to improve compliance in areas such as estate duty, capital gains tax, donation tax, and cross-border transfers by targeting trusts, family offices, and related entities. 

He said that this is necessary as SARS works to close gaps in wealth reporting and ensure proper tax treatment.

A key enforcement area has been lifestyle audits, which Kieswetter said often expose blatant financial misconduct. 

“In our specialised audit thematic interventions that were completed, 236 lifestyle audits were initiated, many of which were flagged by luxury vehicles and properties,” he said. 

“Sadly, luxury vehicles and properties are used to mask financial flows, and it’s straightforward, blatant money laundering. And our focus on that cannot be enough.”

These lifestyle audits have led to tax assessments totalling R1.8 billion. Kieswetter added that SARS has also pursued 28 Pay-As-You-Earn (PAYE) and Employment Tax Incentive (ETI) audits, resulting in assessments of R230 million.

Kieswetter’s message was clear: suspicious wealth that doesn’t align with declared income will be investigated, and SARS is more equipped than ever to follow the money.

Part of a greater scheme 

This focus on wealthy South Africans and luxury purchases is part of the Revenue Service’s strategy to increase compliance and tap into what it defines as ‘unrecovered’ R800 billion in tax revenue. 

This includes identifying some of the thousands of people SARS has indicated are not registered to pay tax despite economic activity exceeding R1 million a year.

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.

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 these processes, which Kieswetter has already yield results.

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

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 the data also shows that some 30,000 individual taxpayers show economic activity of over R1 million a year but are not registered for tax on their system.

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

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