Foreign-owned spaza shops could face SARS scrutiny as tax net widens - IOL
Spaza shops could come under closer scrutiny from the South African Revenue Service (SARS) as the tax authority steps up efforts to bring more of the informal economy into the tax net.
Finance Minister Enoch Godongwana has confirmed that the revenue service is targeting businesses in the informal economy as part of a drive to expand the country’s tax base, with the taxi industry and e-hailing services already identified as priority sectors.
"SARS continues to broaden the tax base by improving registration, filing and payment, where tax compliance remains low. This includes the informal economy and the taxi industry," Godongwana said.
That could put South Africa's vast spaza shop market firmly on SARS's radar. The sector is estimated to generate between R180 billion and R207 billion a year, with tens of thousands of shops operating across townships and communities around the country.
The revenue service has also said that it has already registered 21,890 previously unregistered taxpayers in the informal economy since the 2024/25 financial year, bringing in R314 million in revenue.
Godongwana also said SARS was using data, digital platforms, taxpayer education and simpler registration processes to identify businesses that were not registered for tax.
"The taxi industry, including e-hailing services, has been identified as priority sectors in SARS' informal economy and compliance work. SARS uses risk assessments, available data, targeted interventions and taxpayer education to improve registration, filing and payment in the sector."
Godongwana also said SARS was stepping up its crackdown on illicit financial flows, including tax evasion, customs fraud, money laundering, corruption and organised crime.
IOL also previously reported that SARS recorded 10,142 customs seizures worth R6.3 billion in the 2024/25 financial year, while R6.1 billion was recovered in relation to VAT fraud and illicit gold trading.
The Minister said: "These results demonstrate that SARS’s work to curb illicit financial flows is active, coordinated and linked to direct revenue recovery, prevention of leakage and disruption of criminal value chains."
