The Congress of South African Trade Unions (Cosatu) has demanded that the South African Revenue Service (SARS) intensify its efforts to crack down on tax evasion by high-income individuals and corporations, rather than placing further tax burdens on the public through increased VAT.
Cosatu spokesperson Matthew Parks, in a statement quoted by The Citizen, urged the government to direct more resources to SARS to address tax non-compliance, customs fraud, illicit trade in tobacco and alcohol, and unregulated online gambling platforms.
“This should include targeting tax evasion by high-wealth individuals and companies,” Parks said, adding that plugging these revenue leaks would help protect working-class South Africans from unjust tax hikes.
SARS Commissioner Edward Kieswetter recently revealed that around 100,000 individuals earning over R1 million annually are not even registered with SARS, resulting in an estimated R100 billion loss in potential revenue. Speaking at a News24 event, Kieswetter stated, “Imagine if we could find them. You add another R100 billion onto your tax bill.”
Tax experts noted that SARS likely identified many of these evaders by analysing their spending behaviour. Jashwin Baijoo of Tax Consulting SA told Daily Investor that over 156,000 individuals were either unregistered or had defaulted on their tax filings, a serious concern considering that just 1.6 million taxpayers fund the bulk of the country’s revenue while nearly 30 million citizens rely on social grants.
To address these issues, SARS is set to receive R7.5 billion in funding over the next three years, with R3.5 billion allocated for 2025/26 and another R4 billion earmarked for long-term enhancements. The funds will be used to modernise SARS systems using AI and data science, pursue outstanding tax debt, and combat illicit financial flows.
Kieswetter estimated that South Africa loses R800 billion annually to uncollected taxes, with up to 55% linked to illicit activities. He stressed that building a smarter, tech-enabled SARS is essential to reclaiming this lost revenue and reducing the country’s dependence on tax hikes to fund its budget.