South African taxpayers are being urged to adhere strictly to SARS compliance regulations or risk severe penalties, including hefty fines, reputational consequences, and even criminal charges.
According to tax experts André Daniels, Head of Tax Controversy and Dispute Resolution, and Colleen Kaufmann, Legal Manager at Tax Consulting SA, SARS is ramping up its enforcement efforts and has the mandate, funding, and resources to pursue businesses and individuals who fail to meet tax obligations.
With R7.5 billion in additional funding, SARS is allocating R4 billion for debt recovery and R3.5 billion for modernization, signaling a shift towards data-driven auditing, automation, and enhanced enforcement strategies.
SARS’ Two-Pronged Approach: Support for Compliant Taxpayers, Crackdown on Defaulters
SARS has made it clear that while it will assist compliant taxpayers, it will also take firm action against those who evade or delay payments. This dual strategy is now being implemented with greater urgency.
Tax experts have highlighted that SARS’ investments in advanced analytics and automation mean tax audits are no longer random, but targeted and precise. This enables the revenue authority to pinpoint discrepancies, making non-compliance harder to hide.
Non-Compliance Under Pressure: Voluntary Disclosure Programme (VDP) as an Option
Tax Consulting SA has warned that taxpayers who have failed to rectify their affairs are under increasing scrutiny. SARS offers the Voluntary Disclosure Programme (VDP) as a legal mechanism for non-compliant taxpayers to settle outstanding issues before an audit or investigation begins.
This program is designed to allow taxpayers to correct mistakes, avoid reputational damage, and prevent harsher penalties. However, once SARS launches an audit, the option to voluntarily disclose no longer applies, and taxpayers face civil judgments, penalties of up to 200% of unpaid tax, and possible imprisonment in severe cases.
Is SARS Becoming Too Heavy-Handed? Experts Express Concerns
Despite the intensified enforcement, industry professionals have raised concerns over SARS’ approach. While the revenue service aims to recover tax debt efficiently, some experts warn that overly aggressive action could create unnecessary hardship for businesses and individuals trying to comply.
The South African Institute of Chartered Accountants (SAICA) has cautioned against excessively harsh tactics, highlighting potential risks such as premature garnishee orders and delayed refunds.
In response, SARS Commissioner Edward Kieswetter defended the agency’s stance, stating that it acts within the law and remains open to engaging with stakeholders on compliance issues. SARS spokesperson Siphithi Sibeko echoed this sentiment, adding that fears of excessive enforcement are misplaced and that the organization is committed to building a fair and effective tax system.
The Path Forward: Compliance Is Key
With SARS set to hire an additional 1,700 debt collectors—on top of 750 recruited in 2024—tax enforcement is expected to intensify further.
For taxpayers, the message is clear: maintain accurate records, file tax returns on time, and ensure compliance with SARS regulations. Those who delay risk heavy penalties, while proactive engagement with tax professionals remains the best way to avoid financial and legal repercussions.
