SARS Compliance Program Secures Over R300 Billion in Revenue Collections

The latest Tax Statistics Bulletin, marking its 18th annual release, by the South African Revenue Service (Sars) and National Treasury highlights the effective compliance-focused strategies of the revenue authority.

Sars proudly announces a notable 16.7% rise in compliance collections year-on-year, attributed to “enhanced strategies and diligent implementation of compliance measures.”

This proactive approach has led to a significant increase in revenue collection, escalating from R260.5 billion for the fiscal year 2023/24 to R304 billion in 2024/25.

While this development is beneficial for the country’s financially strained infrastructure, it also signals that Sars will amplify its revenue collection efforts, especially targeting specific groups of taxpayers such as crypto traders and high-net-worth individuals.

Listen: New Sars unit focuses on crypto non-compliance

Sars has opted for historical audits—which may result in severe understatement penalties reaching up to 200% of unpaid tax!

Sars’s extensive audit arsenal

Since the start of 2025, Sars audits have dramatically increased, primarily leading to adjustments caused by taxpayers failing to properly respond to Requests for Relevant Material.

These adjustments often translate into unfavorable findings by Sars, culminating in increased amounts classified as “gross income.”

Often, these adjustments are derived from analyzing taxpayer bank accounts; if a credit transaction remains unexplained, it is presumed to be part of the income. Consequently, additional taxes are levied on these inflated amounts, for which the taxpayer will be held accountable.

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Advancements in technology and machine learning have empowered Sars to extract taxpayer data from crypto trading and investment platforms, aiding the revenue service in identifying owed crypto taxes.

Crucially, for these adjustments to be enacted, Sars must issue additional assessments which, in severe instances of non-compliance, may incur “understatement penalties” of as much as 200% of the unpaid tax!

Prevent criminal charges stemming from crypto non-compliance

Sars is sending out Notices of Audit and Requests for Relevant Material specifically related to the crypto sector.

Those who own or have previously owned crypto assets should not assume that past non-declaration implies Sars won’t pursue tax on these profits moving forward.

Read:
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A review of past violations will occur, and for those crypto traders who evade detection and fail to comply, harsh penalties—or even imprisonment—could be imminent, as stated in Section 234 of the Tax Administration Act, 28 of 2011:

This indicates that while taxpayers are requested to fully disclose local and foreign crypto transactions, the primary aim is verification and not merely data collection.

Heightened scrutiny on high-wealth individuals

High-wealth individuals (HWIs) frequently generate their wealth through complex, multi-faceted investment structures, both domestically and internationally.

In response to these intricate financial arrangements, Sars has intensified its compliance efforts regarding HWIs, utilizing automation and data-driven insights to enhance efficiency and precision in identifying tax non-compliance.

Through modernization efforts, Sars has dramatically improved its ability to monitor and manage the tax affairs of HWIs, casting a wide net to enable quick “risk detection.”

Read:
Sars follows the money [Apr 2024]
Sars’s high wealth unit is utilizing requests for relevant material [May 2024]

To mitigate tax risks, Sars has appointed dedicated relationship managers to wealthy taxpayers, ensuring close oversight of their tax matters.

With improved surveillance, data-sharing capabilities, and automation, Sars can now identify offshore assets and ensure their full declaration.

Statistically, confirmed revenue from this demographic reached R11.76 billion in the last fiscal year.

If you think Sars will allow that number to decrease, think again!

This proactive approach not only enforces compliance but also aids in the precise assessment of tax obligations, minimizing the risk of legal issues for the taxpayer.

Introduction of wealth-seeking initiatives

As Sars continues to enhance compliance programs, non-compliant taxpayers should brace themselves for costly consequences.

Initiating a compliance initiative with a clear goal is a well-known practice of Sars, and it seems this is the case here—ensuring complete disclosure of all interests, whether in South Africa, offshore, or in the Metaverse.

By remaining informed and proactive in compliance efforts, both HWIs and cryptocurrency traders or investors can skillfully navigate the tax landscape, contributing their fair share to tax revenues.

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As taxpayers find themselves in a potentially precarious situation, now mandated to disclose previously undeclared interests, including crypto assets, it is advisable to seek guidance from a tax professional for an optimal compliance strategy.

However, if a taxpayer has already made a self-disclosure and subsequently faces an audit, consulting experienced tax attorneys will facilitate navigation through the intricacies of tax legislation, optimizing compliance and preventing possible prosecution and loss of valuable assets.

Jashwin Baijoo is a partner and head of strategic engagement & compliance at Tax Consulting SA.

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