South African taxpayers face the possibility of higher taxes in the future as the tax base continues to shrink, mainly due to skilled individuals leaving the country.
This was the feedback from Tanya Tosen, Tax and Remuneration Specialist at Tax Consulting SA, who said the pressure on the tax base is already severe.
She noted in an interview that the country has “been there for a while” when it comes to too few taxpayers carrying too much of the burden.
According to Treasury projections, the government expects to collect around R844 billion from individual taxpayers in the current tax year—significantly more than revenue from VAT or corporate taxes.
This growing reliance on personal income tax comes as the number of taxpayers declines.
“If you look at the number of taxpayers year on year that Treasury forecasted for the 2026/27 year, there actually seems to be a reduction of 96,721 taxpayers,” Tosen said.
A key driver behind this decline is emigration, particularly among skilled workers. Tosen pointed to data showing that more than a million taxpayers have left South Africa over the past two decades.
“What’s more concerning is it’s not just any taxpayers—it’s taxpayers who’ve got degrees, postgraduate degrees, so very highly technical skills,” she said.
However, she noted that the trend is not limited to high earners. “We’re seeing a trend that even your lower-income taxpayers are looking to or have left the country. So that trend of people leaving South Africa isn’t slowing down.”
She added that another concern is that many of those who leave do not intend to return, further eroding the long-term tax base.
At the same time, the South African Revenue Service (SARS) is intensifying enforcement efforts to extract more revenue from those who remain.
Tosen said authorities are increasingly focused on personal income taxpayers, with measures such as lifestyle audits and expanded data-sharing initiatives coming to the forefront.
Little relief for taxpayers
She added that enforcement now extends beyond SARS itself. “There’s been a lot of media that the lifestyle audit powers are expanded to at least 14 government bodies, including the Financial Intelligence Centre,” she said.
While these measures may improve compliance, Tosen warned they could also have unintended economic consequences.
“I think it’s also one area which could really chase possibly certain income generators out of the country,” she said.
“SARS is putting a very hard line down on enforcement, and really, there is nowhere else to hide.”
She stressed that taxpayers need to remain fully compliant, cautioning that tax liabilities can be revisited indefinitely.
“Tax liabilities never prescribe; they can go as far back as they want to. It’s a dangerous game.”
With limited options available to raise additional revenue, the government has also explored alternatives such as a wealth tax.
However, Tosen believes this could be risky. “It might be politically attractive in the short term, but it is economically very risky,” she said, adding that authorities are also considering other avenues like gambling taxes.
Although taxpayers received some relief through inflationary adjustments to tax brackets, Tosen said this offers only limited comfort.
“We can’t be ungrateful for little mercies, but if you look at the bigger scheme of things, it really doesn’t account for much,” she said.
Looking ahead, she warned that global pressures could further strain South Africans’ finances.
“With this whole war in the Middle East and oil prices, it will have a massive knock-on effect to everything and everyone— inflation, food prices, you name it.”
