SARS teaches taxpayers a R155 million lesson

SARS has sent a stark warning to taxpayers by securing the provisional sequestration of a company director over R155 million in unpaid taxes, showing its willingness to use severe legal measures against non-compliance.

On 29 November 2025, the South African Revenue Services’ (SARS) provisional sequestration of Roy Muleya, sole director of a company with a tax liability of about R155 million, was confirmed by the North Gauteng High Court.

Tax Consulting SA’s Associate Director and Head of Strategic Engagement & Compliance, Jashwin Baijoo, said this new notch in SARS’ belt clearly shows the taxman’s far-reaching powers and zero tolerance for non-compliance.

“Where taxpayers opt to wilfully disregard their obligations by acting outside the remit of the law, SARS will make it hard and costly,” SARS Commissioner Edward Kieswetter commented after the victory.

Kieswetter said SARS will continue to act lawfully and decisively against those who deliberately seek to evade or neglect their tax responsibilities.

“The message we want to communicate is that no matter how long it takes, SARS will not abdicate its responsibility to enforce the law,” the commissioner said.

In Muleya’s case, the legal action taken by SARS places an individual’s estate under external administration due to insolvency or unpaid debts, particularly related to tax liabilities, Baijoo explained.

“Such measures indicate a rigorous approach to financial management, aiming to protect state revenue while targeting defaulters without hesitation,” he said.

“The objective of making non-compliance hard and costly has shown a clear positive impact on SARS’ tax debt collections.”

SARS’ 2024/25 Annual Report, published on 30 October 2025, revealed a substantial net revenue collection of R1.86 trillion, with personal income tax remaining the largest contributor, at R733.2 billion.

This taxpayer segment alone showed a 12.6% increase in collections from the 2023/24 period, Baijoo said.

SARS clamps down on tax avoidance

Baijoo explained that the tax authority is strengthening its regulatory framework to combat tax evasion more effectively.

“This includes new regulations on Crypto-Asset Reporting and revisions to the Common Reporting Standards,” he said.

The seizure of assets from individuals like Muleya, he said, is a clear message that SARS is prepared to employ severe measures against tax defaulters.

“SARS’ strategy to instil a sense of urgency and responsibility among taxpayers hinges on making non-compliance both hard and costly,” he said.

“By detecting and addressing non-compliance rigorously, SARS aims to deter tax evasion and ensure that all taxpayers fulfil their obligations.”

According to Baijoo, this approach shows that no taxpayer, regardless of their economic standing, is beyond the reach of SARS’ compliance efforts.

Recent trends in this regard have also shown SARS considering not just current compliance but also delving into historic risks of non-compliance.

In some instances, SARS is even requesting taxpayers to “look into their crystal balls” and provide SARS with income and expenditure estimates for future tax periods.

“With SARS’ enhanced detection capabilities and a sharp focus on both past and future non-compliance, correct tax and legal guidance have never been more critical,” he said.

Baijoo explained that the most prudent approach taxpayers can take is to heed SARS’ warning that non-compliance will be both hard and costly.

“In order to protect yourself from financial ruin and even possible jail time, it remains the best strategy that you always ensure compliance,” he said.

For those who find themselves on the wrong side of SARS, there is a first-mover advantage in seeking the appropriate tax advisory.

Ensuring the necessary steps are taken allows taxpayers to protect both themselves and their unblemished records from paying the price for what could be the smallest of mistakes.

“However, where things do go wrong, SARS must be engaged legally, and we generally find them utmost agreeable where a correct tax strategy is followed,” Baijoo said.

As a rule of thumb, Baijoo said that any and all correspondence received from SARS should be legally addressed, as legal professional privilege is often a must in instances of non-compliance.

This will help safeguard against SARS implementing collection measures or potentially criminal charges against the taxpayer.