SARS nails taxpayers for R300 billion
The South African Revenue Service (SARS) has recorded a 16.7% increase in what it calls “compliance collection”, where the taxman brought in R304 billion by chasing after taxpayers.
This includes an R11.8 billion haul from hunting down money owed by high net worth individuals.
Through the use of “targeted strategic initiatives”, SARS brought in R44.5 billion more in the 2024/25 fiscal year than the R260.5 billion in 2023/24.
While this is a positive outcome for the fiscus, tax experts at Tax Consulting SA said that it comes completely at the expense of taxpayers and shows that SARS is aggressively chasing after revenue.
It warned that SARS is doubling down on this aggression and is focusing on specific taxpayer segments, such as crypto traders and high-net-worth individuals.
This includes the adoption of tighter crypto trading regulations, coming into effect in March 2026, as well as cutting lifelines often used by HNWIs and businesses to avoid tax liabilities.
However, SARS isn’t solely focused on specific groups and will come after any and all who owe it money.
Tax Consulting said that one of the taxman’s favourite tools to do this is historical audits, which can carry astronomical understatement penalties of up to 200% of the tax liability.
“Since the start of 2025, we have practically seen a significant spike in SARS audits, which in most cases result in the audit being finalised with adjustments due to taxpayers missing the request for relevant material,” Tax Consulting said.
“What this means for you is an adverse finding being made by SARS, and manifested in upward adjustments on amounts included in ‘Gross Income’.”
The adjustments often stem from an analysis of taxpayer bank accounts, and where a credit transaction is unexplainable, is deemed to form part of income.
Additional taxes are then levied on this upward adjustment amount, which the taxpayer is wholly liable for.
Current technological advancements and machine learning now also grant SARS access to taxpayer information from cryptocurrency trading and investing platforms, allowing the revenue authority to make determinations on crypto-taxes as well.
It is noteworthy that to give effect to these adjustments, SARS must issue additional assessments, which, in extreme cases of non-compliance, may impose understatement penalties.
Where the understatements are significant, SARS will not allow the excuse of “bona fide error” to be used and will come after the taxpayer with full force.
Taxpayers in the crosshairs
Tax Consulting said that 2025 was also the year where SARS issued more Notices of Audit and Requests for Relevant Material for crypto traders.
In line with its strategy to go after historic money owed, it warned anyone in South Africa who holds, or has ever held, crypto, not to think themselves exempt from this.
“Crypto traders should certainly not assume that historical non-declaration means that SARS will not look to tax these profits in future,” it said.
Not only will a review of the historical transgressions be conducted, but should the crypto trader under the radar not comply, severe penalties, or even jail-time are immediately on the cards, per section 234 of the Tax Administration Act, 28 of 2011.
“Practically, this means that even though taxpayers are requested to make full disclosures to SARS on local and foreign crypto transactions, this is more for verification than data gathering purposes,” the tax experts said.
For high net-worth taxpayers, SARS’ collection focus on HWIs is intensifying, aided by the use of automation and capitalising on data-driven insights to enhance efficiency and accuracy in the detection of tax non-compliance.
“Through its modernisation, SARS has significantly bolstered its capabilities to monitor and address the tax affairs of HWIs, casting its collection net as wide as possible and enabling swift ‘risk detection’,” the group said.
To mitigate these tax risks, SARS assigned dedicated relationship managers to the wealthy, who are responsible for closely monitoring their clients’ tax affairs.
Through its enhanced surveillance, data-sharing mechanisms, and processing automations, SARS can now detect these offshore assets and ensure they are fully declared.
“Statistically, the confirmed revenue performance from this segment of society is recorded at R11.8 billion in the last fiscal year,” Tax Consulting said.
The group warned that SARS is unlikely to let this number diminish and will be working to see it grow.
“As SARS continues to upgrade its compliance programmes, taxpayers in the wrong can expect their non-compliance to be both hard and costly,” the group said.
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