Africa-Press – South-Africa. South African Revenue Service (SARS) officials are given extensive tools through the Tax Administration Act (TAA) to go after anyone trying to dodge taxes, including confiscating passports.
These tools, enabled by the TAA, have serious implications for all levels of taxpayers, including the super wealthy, businesspeople, expatriates, and even foreigners working in South Africa.
Not only can the South African Revenue Service (SARS) impose travel restrictions on those travelling abroad, but the taxman can also demand that they surrender their passport.
This should put to rest any inkling would-be tax dodgers might have that they can escape the reach of the revenue service by booking it out of the country.
The TAA explicitly states that a senior SARS official can require a “taxpayer to surrender their passport to SARS.”
It also allows SARS officials to impose travel restrictions on expatriates travelling abroad on a South African passport and also block foreign passport holders from conducting business in the republic.
According to tax experts, Jashwin Baijoo and Delano Abdoll from Tax Consulting SA, this should serve as a warning to non-compliant taxpayers who think they can outmanoeuvre the revenue service.
For example, the experts said that there is a common misconception among wealthy South Africans that they can just “pack up and leave” if SARS finds them to be non-compliant.
However, if the taxman invokes its powers in the TAA to fulfil its collection mandate—as it has already done—even the richest could find themselves having to surrender their passports.
For those already abroad, including expatriates who are still tax residents in South Africa, falling foul of SARS could see them end up having travel restrictions imposed on them.
In both instances—without a passport, or with targeted travel restrictions imposed—a taxpayer cannot go anywhere before they have paid their dues to SARS.
The TAA also allows senior SARS officials to withdraw a taxpayer’s authorisation to conduct business in the Republic of South Africa.
Thus, foreigners are also at risk if they do not align with local tax laws and give SARS its cut.
If they disregard their obligations, SARS can close their business, which will affect any Work or Residency Visas they may hold and their ability to have a South African bank account.
SARS can even require a taxpayer to cease trading, which has significant implications for any business.
The High Court in Pretoria recently ruled that these provisions in the TAA are constitutional, leaving taxpayers with little choice but to comply.
The court also found that the limitations imposed on the taxpayer’s rights were reasonable and justifiable in an open and democratic society, given the importance of tax collections for the public interest.
“This precedent-setting decision reaffirms SARS’ legal authority to discharge its work of collecting all revenue due to the state efficiently and effectively,” said SARS following the ruling.
Importantly, the court reiterated that the provisions that allow SARS to determine third-party liability, repatriation of foreign assets and restrictions of travel are lawful and constitutional.
SARS can take money out of your bank account
SARS Commissioner Edward Kieswetter is ramping up the taxman’s collection efforts.
Tax Consulting SA also recently highlighted that SARS will even look directly into a bank account as it looks to boost state finances amid increased government spending and limited economic growth.
SARS monitors South Africans’ bank accounts to find taxpayers whose lifestyles don’t match their tax contributions.
SARS commissioner Edward Kieswetter highlighted this trend while presenting South Africa’s record tax haul for 2024/2025.
Kieswetter said collections reached a staggering R2.303 trillion, a record figure that beat even the National Treasury’s estimates.
With GDP growth limited at just 0.7% in 2023 and 2024, much of the increase in the state’s coffers comes from SARS’ focus on compliance.
SARS is taking full advantage of technological advancements to pursue taxpayers, with the taxman focusing on advancements in AI, data science, and machine learning algorithms to counter criminality and non-compliance.
These data-driven insights give SARS of all transactional records about specific taxpayers, with AI massively reducing man-hours and concomitant room for error.
Kieswetter said an entire team is no longer required to extrapolate these records into strong legal cases for non-compliance, with tech-savvy individuals instead working with AI.
Microsoft President Brad Smith recently praised SARS’s use of AI during a trip to South Africa, where he met Kieswetter and several other key private and public sector members.
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