South Africa Loses Billions as 100,000 Millionaires Avoid Tax Registration

South Africa is losing R100 billion in tax revenue as 100,000 high-earning individuals—each making over R1 million annually—avoid tax registration, according to SARS Commissioner Edward Kieswetter.

The Hidden Tax Evasion Crisis

Speaking at a News24 post-Budget event, Kieswetter highlighted the urgent need to track unregistered taxpayers.

“There are probably at least 100,000 individuals in South Africa earning over R1 million who are not on our register. Imagine if we could find them. You add another R100 billion onto your tax bill,” he said.

Tax experts believe SARS is identifying evaders by monitoring spending patterns, according to Daily Investor.

The Numbers Behind the Tax Burden

• 156,000 taxpayers are either unregistered or have defaulted on their tax filings, said Jashwin Baijoo from Tax Consulting SA.
• Only 1.6 million taxpayers fund the majority of government revenue.
• Meanwhile, nearly 30 million South Africans rely on social grants.

SARS’ Plan to Crack Down on Tax Dodgers

The government is allocating R7.5 billion over three years to enhance tax collection, including:

• R3.5 billion in 2025/26 for tax compliance and revenue tracking.
• An additional R4 billion over the medium term for tax recovery efforts.

SARS will use AI, machine learning, and data analytics to detect illicit financial activities and pursue tax debts.

R800 Billion in Lost Revenue

Kieswetter estimates that South Africa loses R800 billion annually due to:

• 40%-45% from outstanding tax debts and unfiled returns.
• 55% from illicit financial flows and tax crimes.

Can SARS Recover Lost Billions?

As SARS strengthens its systems, the challenge remains: Will South Africa’s wealthy tax evaders finally be held accountable?

With billions at stake, tightening compliance could be a game-changer for the country’s struggling economy.

{Source African Insider}

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