Sars now turns to high-wealth individuals who pay almost half of all personal income tax

The South African Revenue Service (Sars) is now focusing on the country’s high-wealth individuals, who contribute almost half of South Africa’s personal income tax, and will be “formally engaged” to ensure they pay their taxes. The local tax authority defines high-wealth individuals as people with gross assets of R75 million or more. Morné Janse van Rensburg, managing director of Hobbs Sinclair Advisory, says they play a significant role in South Africa’s tax base.

“Although they represent a small proportion of taxpayers, their income, investment activity and asset holdings contribute materially to national revenue. In South Africa, a relatively small group of taxpayers contributes a substantial share of total tax collections. “This concentration explains whySars formalised its engagement with high-wealth taxpayersand applies a more structured compliance approach to this segment.” He points out that Sars collected approximately R1.9 trillion in net tax revenue in the 2024-25 fiscal year, a 6.6 % increase on the previous year.

Personal income tax remained the largest contributor, accounting for close to 40 % of total collections. Recent data show that roughly 7.3% of taxpayers account for nearly 48.6% of all personal income tax, underscoring the reliance on high-income and high-asset individuals, Janse van Rensburg says. “Sars responded to this concentration byestablishing the High-Wealth Individual Unit(HWIU) in April 2021, in line with international revenue authority practice.” The unit focuses on taxpayers with complex financial affairs, including those with: “High-wealth taxpayers typically operate across several structures and jurisdictions.

[paywall]

From Sars’ perspective, that complexity requires closer monitoring and more detailed engagement to ensure tax positions are accurate and consistent,” he says. As part of this approach, Sars expanded disclosure requirements. Taxpayers with assets of R50 million or more are now required to submit a high-level balance sheet reflecting local and foreign assets and liabilities. This marks a shift towards assessing overall wealth rather than relying solely on annual income declarations, Janse van Rensburg says.

[/paywall]