South Africans are increasingly facing tax compliance issues due to relying on unqualified advice from friends and family, a practice identified as a primary contributor to non-compliance within the country. Indeed, South Africans turning to friends and family for tax advice is one of the leading causes of non-compliance. This trend has emerged even as the South African Revenue Service (SARS) reported significant revenue collection. For the 2026 financial year, SARS’s revenue collection surpassed R2 trillion. The reliance on informal advice shows a challenge for SARS in ensuring accurate tax submissions and maintaining the integrity of the tax system.
Causes of Non-Compliance
Tax compliance involves more than simply filling out forms and submitting documents to the South African Revenue Service (SARS). In fact, tax requires far more than merely completing forms and submitting documents to SARS. Non-compliance can stem from various issues, such as difficulties in correctly navigating the SARS e-filing system or making a technical error related to a recently amended tax law. Reasons for non-compliance can include incorrectly navigating SARS e-filing or making a technical error on a law that has changed. These procedural and legislative complexities often lead taxpayers into unintentional breaches of regulations.
Another significant reason for non-compliance is a misunderstanding of specific tax areas and their associated requirements. For instance, taxpayers might incorrectly apply for a South African non-residency certificate under an inappropriate category, leading to incorrect declarations. Misunderstanding an area of tax and its requirements, such as getting a South African non-residency certificate under the incorrect category, is another reason for non-compliance. The complexities surrounding residency status are particularly critical for accurate tax submissions. A taxpayer's precise tax residency status ultimately dictates which income streams must be declared to SARS and, consequently, how their tax returns should be completed. Tax residency status ultimately determines what income must be declared to SARS and how tax returns should be completed. Incorrectly assessing or reporting this status can have substantial implications for their overall tax obligations and compliance standing with SARS.
Some tax returns are submitted as a ‘nil return’, meaning they are completed with just zeros. This practice can result in a SARS statement of account showing no tax due, or allow a taxpayer to obtain a tax clearance certificate. This can allow a SARS statement of account to be issued showing no tax due or enable a taxpayer to obtain a tax clearance certificate. Such actions, while appearing to simplify the tax process for individuals, can contribute to systemic non-compliance and undermine the integrity of the tax system.
SARS Performance and Efforts
Improving tax compliance has been a focus area for the South African Revenue Service (SARS), particularly under former commissioner Edward Kieswetter. Tax non-compliance remains a significant issue in South Africa, yet compliance interventions generated approximately R316 billion in revenue for SARS in 2026. Tax non-compliance is a large issue in South Africa, with compliance interventions generating approximately R316 billion in revenue for SARS in 2026. For the 2026 financial year, SARS reported that its VAT voluntary compliance index reached 67.19%, while payment compliance stood at roughly 75%. For the 2026 financial year, the SARS VAT voluntary compliance index reached 67.19%. This VAT voluntary compliance index was an approximately 0.5% increase from the previous year. Payment compliance had reached roughly 75% in the 2026 financial year. These figures highlight SARS's ongoing efforts to improve tax collection and enforcement within the country.
Mr. Kieswetter attributed the revenue collection achievements to the diligent work of the agency's staff. "Collecting over R2 trillion is not an accident, but the outcome of the more than 14,500 employees who diligently perform millions of activities meticulously to achieve this record collection," he stated. He emphasized the broader impact of effective tax collection, adding, "Every rand not only helps build a capable state that honours the social contract but also enables the state to deliver for all South Africans and strengthen the fiscal integrity of South Africa." For the 2026 financial year, SARS’s revenue for the 2026 financial year exceeded R2 trillion, specifically approximately R24.7 billion higher than initial estimates. This over-performance shows the effectiveness of the strategies implemented by SARS.
These efforts occur within a landscape where firms like Tax Consulting South Africa, one of the country’s largest tax consultancy and advising firms, play a role in guiding taxpayers. Tax Consulting South Africa is one of the country’s largest tax consultancy and advising firms.
Expert Commentary
Data indicates that involvement of "family and friends" is the primary indicator for tax non-compliance. In fact, ‘family and friends’ being somewhere involved is the clear top-ranking non-compliance indicator. Some tax returns are submitted as "nil returns," containing only zeros. This practice can result in a SARS statement of account showing no tax due, or allow a taxpayer to obtain a tax clearance certificate. The VAT voluntary compliance index for the 2026 financial year showed an approximately 0.5% increase from the previous year. Additionally, SARS revenue for the 2026 financial year was approximately R24.7 billion higher than initial estimates. The persistent issue of unqualified advice notes the ongoing need for public education and accessible, reliable tax resources to ensure accurate and compliant tax submissions across South Africa.
