SARS Cracks Down on the R800 Billion Tax Gap – What You Need to Know
South Africa’s 2025 Budget allocation has made one thing clear: SARS is intensifying its efforts to close the country’s tax gap, now estimated at a staggering R800 billion. This renewed focus means that taxpayers—both individuals and businesses—face increasing scrutiny, tighter compliance requirements, and more aggressive collection tactics.
If your tax affairs are not in perfect order, now is the time to act. Here’s what you need to know about SARS’ 2025/26 strategy—and how we can help you stay compliant and avoid unnecessary penalties and interest.
What Is the Tax Gap?
The tax gap is the difference between taxes legally owed and taxes actually collected. According to SARS Commissioner Edward Kieswetter, this gap includes:
- R400 billion in undisputed, uncollected tax debt
- R100 billion in tax currently under dispute
- 54 million outstanding tax returns
- Over 150,000 unregistered or non-compliant taxpayers with active economic footprints
The rest is made up of tax evasion tactics like base erosion, transfer pricing, illicit trade, unpaid VAT, and excise duties. Instead of introducing higher VAT rates, the Commissioner has made it clear that closing the tax gap is a smarter way to stabilise the fiscus.
SARS Gets a Boost: More Resources, More Collection
The National Treasury has earmarked R2.5 billion in additional funding for SARS for the 2025/26 financial year. Of this, R2 billion will go directly towards a large-scale debt recovery programme, while R500 million will upgrade SARS’ digital systems, making it even easier to flag non-compliance.
What Does This Mean for You?
The implications are clear:
- Increased risk of verifications, audits, and SARS enquiries
- Faster and more forceful debt collection efforts
- Higher likelihood of penalties and interest charges for late filings or under-declared income
SARS is watching—closely. But we’re here to help you navigate this challenging environment.
How We Help You Stay Compliant
Tax compliance starts with the basics:
✔ Registering for the correct tax types
✔ Submitting accurate returns on time
✔ Paying the correct tax amounts promptly
✔ Responding quickly to SARS correspondence
✔ Resolving penalties or interest charges without delay
We provide specialised tax support to ensure your affairs are in order and that you’re ready for any SARS interaction.
Here’s how:
- We respond promptly and professionally to all SARS notices, demands, and queries.
- We act swiftly when tax debts arise. Taxpayers only have 10 business days to respond to a Final Demand from SARS by either paying the amount, applying for a deferral, objecting, or arranging a compromise.
- We monitor SARS’ procedures to ensure they follow the law—protecting you from illegal actions like unauthorised bank withdrawals.
Final Thoughts: SARS Means Business – So Should You
SARS has made it clear: it will be relentless in closing the tax gap. Non-compliance—whether intentional or accidental—will attract attention, penalties, and interest.
As SARS ramps up collections, we remain committed to helping you maintain full tax compliance, protect your rights, and avoid costly mistakes.
Don’t get caught off guard. Let us help you mind the tax gap—before SARS does.