1,156 rich South Africans owe SARS R62 billion

Finance Minister Enoch Godongwana revealed that 1,156 individuals owe the South African Revenue Service (SARS) more than R10 million each.

Godongwana shared this information following a parliamentary question from a member of parliament (MP), Alan Beesley.

Beesley asked the Finance Minister about the total number of individuals and companies that owe SARS over R10 million.

Godongwana said 1,156 South Africans owe SARS over R10 million each, amounting to R61.92 billion, including capital, interest, and penalties.

He added that 2,901 companies owe SARS over R10 million each, which amounts to R215.75 billion. It also includes capital, interest, and penalties.

Considering the billions owed to SARS by rich individuals and South African companies, it is hardly surprising that the revenue service is cracking down on non-compliance.

SARS launched its High Wealth Individual Unit in April 2021 to provide clarity and certainty to HWI taxpayers.

This unit aims to facilitate these individuals’ compliance with their tax regulations by offering specialised services.

“Our focus is to promote voluntary compliance, enhance revenue collection, and foster a fair tax environment,” SARS explained.

“As much as the HWI Unit is dedicated to assisting taxpayers with their legal obligations, we are equally committed to detecting and deterring non-compliance.”

SARS’ HWI Unit’s mandate is to deal with the complexity of HWI taxpayers’ tax affairs and afford them a differentiated and dedicated end-to-end service.

“By delivering an efficient service to HWI taxpayers, the HWI Unit aims to improve voluntary compliance,” the revenue service said.

Earlier this year, SARS increased its crackdown on HWIs by introducing a new initiative targeting these taxpayers.

Tax Consulting South Africa said SARS started sending these taxpayers an introduction note to their “dedicated relationship managers”.

“The note is framed as a shift in how SARS interacts with its high-value taxpayers, offering a more personalised approach to tax compliance and advisory services,” it said.

The revenue service defines an HWI as someone with gross assets worth R75 million or more.

“This group of taxpayers plays an important role in South Africa’s economy and in sustaining revenue growth,” SARS said.

Although SARS’s HWI unit positions itself as helping these taxpayers, it also states that it “will act without fear or favour to make non-compliance hard and costly”.

Tax Consulting said it has seen increased attention from SARS on HWIs, which often involves in-depth reviews of their tax filings and financial activities.