The South African Revenue Service (Sars) is moving fast to tighten the tax net. This is not reform; it is an offensive – and entirely consistent with Commissioner Edward Kieswetter’s strategic mantra of making non-compliance hard and costly.

Empowered by a special initiative, referred to as Project AmaBillions, to maximise revenue collection from tax debt and outstanding returns, taxpayers can expect less tolerance and more action from Sars this tax season.

Compliance Tops the Agenda 

By now it is no secret that Sars is increasingly using AI driven-enforcement strategies and implementing stricter compliance initiatives to identify discrepancies and collect what is due. With additional funding secured from National Treasury, taxpayers should prepare for more targeted and significantly more aggressive audits. Leniency has come to an end.

Some reports conservatively estimate that 25% of tax returns are audited, but this may soon be much higher.

Verifications and Audits Yield Results for the Tax Man

After Sars’ Compliance Programme interventions yielded more than R160-billion in additional revenue from executing 1.7-million verification cases and 230 000 tax and customs compliance audits in the 2024/25 financial year, more verification and audit notifications may be on the way.

A special revenue recovery project, with 1 000 ring-fenced resources focusing on debt collections, verifications and audits, finalised 1.1-million cases with a value of R46-billion, Commissioner Kieswetter revealed during the 2025 Revenue Collection Announcement.

Sars can Select Any Taxpayer for Verification or Audit

Verification means that Sars checks the accuracy of information that the taxpayer gives in a declaration or tax return against third-party data, financial and accounting records, and other supporting documents. These verifications and audits are applicable to all tax types for which the taxpayer is registered and includes, but are not limited to, VAT, Income Tax (both individual and corporate), Payroll taxes as well as Customs and Excise.

Should the verification lead to financial risk being posed by your tax position, you will be referred to an audit, where Sars examines your financial statements, accounting records, and supporting documents to check that you correctly declared your tax position. If the taxpayer did not file a declaration or tax return, the audit will investigate whether the taxpayer’s actions comply with tax law. 

These audits or verifications may not only result in additional taxes liabilities, but Sars may also impose penalties of up to 200% on the audit adjustments identified during the audit process. 

From a tax practice perspective, the following types of claims will generally trigger a review by Sars:

1.      Home office expense claims;

2.      Deductions against travel allowances;

3.      Significant rental property expenses, particularly repairs and maintenance;

4.      Medical expense claims, especially for out-of-pocket or non-medical-aid-covered costs;

5.      Donations to public benefit organisations (PBOs), especially large or irregular amounts;

6.      Retirement annuity fund contributions not reflected on the tax certificate (IT3(f));

7.      Disallowed prior-year expenses re-claimed in the current year;

8.      Large wear-and-tear (depreciation) deductions on personal or mixed-use assets;

9.      Claims for professional fees or training that may not meet the “wholly and exclusively” test; and/or

10.   Capital gains declared with unusually low proceeds or high base costs.

It is essential to understand that while these claims may be legitimate, the burden of proof is on the taxpayer. This means you must retain and be able to provide supporting documents—such as invoices, logbooks, medical certificates, donation receipts, and lease agreements—when requested. Failure to do so can result in the disallowance of the deduction, interest charges, and even penalties. Ensuring your documentation is accurate, relevant, and readily available is not just best practice—it’s your first line of defence during a Sars review.

Black Ops to Eradicate Evasion

Behind the scenes, Sars is executing a black-ops-style audit regime, through Project AmaBillions. Enhanced data matching, AI analytics, and high-level inter-agency coordination—including with the Financial Intelligence Centre (FIC), National Prosecuting Authority (NPA), and SAPS—are transforming what used to be slow and scattered audits into swift, coordinated strikes. 

Commissioner Kieswetter’s vision of restoring public trust through visible and deliberate enforcement is taking real form.

Ease of Compliance, Zero Tolerance for Evasion

For compliant taxpayers, the environment is becoming more navigable: Sars is improving systems, accessibility, and response times. But for those on the margins—those who have historically relied on low visibility or outdated processes to escape scrutiny—the landscape has changed. Non-compliance is no longer a low-risk game.

Legal Defence from Day One

Once an audit or investigation begins, it is already the result of a flagged risk. Whether triggered by lifestyle mismatches, under-declarations, or foreign holdings, early intervention is critical. A legal response isn’t a formality—it’s a safeguard. Mistakes, overreach, or unlawful demands must be challenged strategically from the outset to avoid escalation, penalties, or criminal referral.

Conclusion

Non-compliance is no longer an oversight; it is a risk. While Sars is encouraging voluntary compliance, it is going all out to punish non-compliance with maximum force. With Sars becoming faster, smarter, and better resourced, every taxpayer—individual or corporate—must reassess their exposure. 

The age of passive enforcement is over. Prepare accordingly.

Written by André Daniels, Head of Tax Controversy & Dispute Resolution at Tax Consulting SA