The South African Revenue Service (SARS) is moving away from a rules-based approach to tax enforcement and toward what it calls behaviour-based risk management. It is sparking a tax revolt in South Africa.
The shift is spelled out in SARS’ Strategic Plan 2025/26 to 2029/30, which frames the end goal as a system where “tax just happens”, meaning collection becomes largely automatic, with less room for delays or detection avoidance.[1]
In practice, that means more data analytics, refined algorithms and real-time risk profiling. If your tax affairs are not in order, SARS is now more likely to know about it before you decide to act.
What SARS enforcement looks like
In the final stretch of the 2025/26 revenue collection period, which ended on 31 March 2026, SARS issued urgent correspondence to individuals, companies and trusts alike, demanding that outstanding tax affairs be brought up to date within days.
The correspondence included Final Letters of Demand, threatening possible criminal prosecution for taxpayers who failed to submit outstanding returns.
Tax Consulting South Africa’s head of tax controversy and dispute resolution, André Daniels, highlighted one case where an individual received a final demand covering six years of outstanding returns, with only 10 business days to comply.
“Filing six historical tax returns within 10 business days is no easy task,” Daniels said. “This serves as a warning to taxpayers to remain compliant and up to date.”
Final demands for Trusts
Trusts have received particular attention. Around 300 000 trusts are registered with SARS, but it is estimated that only 180 000 have filed tax returns. The estimated revenue gap from that non-compliance sits between R50 billion and R60 billion.
SARS began issuing final demand notices to trusts with outstanding 2024 and 2025 returns on 3 February 2026. Trustees who receive a final demand have 21 business days to submit outstanding returns, with no further grace period.
Dormancy is not an excuse. “All trusts registered with the Master are affected, without exception, including dormant or inactive trusts,” SARS has stated.
The important numbers
Around 2.4% of South Africans pay 77% of all personal income tax, with the top rate sitting at 41%. On the corporate side, 1 051 companies account for 72.3% of all corporate income tax.
That is a very narrow base carrying a very wide load. And the load is growing.
New SARS commissioner Yanga Makhubu has signalled that the era of warnings and reminders is over. “However, if that compliance still does not come through, then we have to responsibly enforce, and we do intend to heighten our integrated enforcement going forward,” Makhubu said.
The revolt Roodt is describing
While SARS tightens its grip on one end, Efficient Group chief economist Dawie Roodt told Moneyweb a tax revolt is already underway in South Africa.[2] This, he said, is taking the form of aggressive tax planning, capital flight and skilled emigration.
“People are managing their tax affairs very aggressively. People are taking their money offshore and engaging in aggressive tax planning,” Roodt said. “People are using various strategies in their companies and personal structures to pay as little tax as possible.”
In more extreme cases, people are emigrating, or choosing to stop working entirely because the tax burden has become too heavy.
South Africa has, in Roodt’s view, passed the point on the Laffer Curve where further income tax increases generate more revenue.
Laffer Curve:
An economic theory showing the relationship between tax rates and government tax revenue. Popularised by economist Arthur Laffer in 1974, it suggests that 0% and 100% tax rates both yield zero revenue, meaning an optimal tax rate exists between them to maximize state income.
Source: Investopedia
“We’re past that when it comes to personal income taxes,” Roodt told Moneyweb. “We’re probably past that when it comes to corporate income taxes.”
What it costs a household
Roodt put a figure to the imbalance at the Kragdag Conference. A family earning R1 million per year receives roughly 2 to 3 cents back from the state in benefits for every rand they pay in tax.
“That single family earning R1 million per year effectively carries the cost of healthcare, education, policing, and similar services for 20 poor families,” he said.
State employees, he added, represent 3% of the population but account for 17% of the economy in salaries.
Roodt is careful to note the danger in an outright tax boycott. Many South Africans, including children, rely on government grants to survive, and those grants are funded through taxes. “Once people stop paying taxes, it’s nearly impossible to convince them to start again,” he has warned.
Where this leaves you
Two things are happening simultaneously.
- SARS is building the infrastructure to find non-compliance faster and pursue it harder, including criminal prosecution.
- At the same time, the taxpayers it depends on most are finding legal ways to reduce what they contribute, or leaving altogether.
Daniels’ advice is direct: respond promptly to any SARS correspondence, determine exactly what is outstanding and act before an audit begins.
“Once an audit or investigation has commenced, the door to voluntary disclosure closes.”
The revenue service’s own strategic plan says tax should “just happen”. Whether enough taxable income stays in the country to make that work is a different question altogether….
Sources
[1] SARS – Strategic Plan 2025/26–2029/30 Parliamentary Monitoring Group SA., n.d.
[2] Moneyweb. SA’s tax revolt is already underway, says economist, 11 August 2026.
