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 why Sars formalised its engagement with high-wealth taxpayers and applies a more structured compliance approach to this segment.”
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Personal income tax largest contributor for Sars
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 by establishing 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:
- Multiple local and offshore income streams
- Trust, corporate and family ownership structures
- Cross-border investment portfolios
- High-value property and luxury assets
- Significant discretionary and lifestyle-related spending.
“High-wealth taxpayers typically operate across several structures and jurisdictions. From Sars’ perspective, that complexity requires closer monitoring and more detailed engagement to ensure tax positions are accurate and consistent,” he says.
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New Sars approach to high-wealth individuals includes expanded disclosure requirements
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.
“This change indicates that Sars is looking at the full financial picture. Asset growth, offshore exposure and structural arrangements are increasingly reviewed alongside reported income. Sars is increasingly able to identify undisclosed offshore assets using international information-exchange agreements and enhanced data-matching capabilities.”
Janse van Rensburg says the HWIU operates through a relationship-management model, where a qualified and dedicated Sars relationship manager is assigned to qualifying individuals to coordinate compliance across multiple tax types, manage queries and facilitate consistent engagement. However, he points out that relationship management does not replace enforcement. “It reflects an expectation that high-wealth taxpayers engage properly, respond timeously and maintain defensible tax positions.”
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High-wealth individuals need experts to help them with Sars and tax
Given the complexity of wealth structures and evolving Sars requirements, HWIs are generally advised to work with both accounting specialists and tax attorneys. This coordinated approach supports:
- Accurate and consistent tax filings
- Appropriate structuring of trusts, companies and offshore holdings
- Effective procedural and legal engagement with Sars
- Reduced risk of disputes escalating unnecessarily.
Janse van Rensburg says sometimes a tax issue is not an accounting problem, but a legal or procedural one. That is where accountants and tax attorneys working together can engage Sars effectively and resolve matters efficiently.
“As Sars continues to refine its compliance frameworks and data capabilities, expectations around transparency and alignment remain high. For high-wealth individuals, understanding how Sars assesses total wealth and not just taxable income, is central to managing compliance risk.”
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