Tax Consulting South Africa’s 20th annual post-Budget webinar, attended by over 1 000 payroll, HR, and remuneration professionals from as far as Mauritius, the United Kingdom, the United States and Canada, cast a spotlight on these issues through participant polling.
While the sessions unpacked key announcements from the South African Budget 2026, discussions quickly turned to a deeper concern: the sustainability of South Africa’s personal income tax base.
The high level of participation in the webinar polls reflected key themes that companies are currently navigating — from the impact of a shrinking taxpayer base to greater global financial transparency and tighter compliance enforcement.
A Declining Taxpayer Base Poses Challenges
The South African Revenue Service (SARS) expects to collect R844 billion in personal income tax in 2026/27, rising to R947 billion in the outer year of the medium-term framework.
According to National Treasury, the number of registered taxpayers is expected to decline by 196,721 to around 14.248 million in the 2026/27 tax year, even as government expects personal income tax collections to remain the largest contributor to the fiscus.
In webinar polling, 33% of participants said they believe SARS will respond with more aggressive enforcement if the number of taxpayers continues to fall, while 30% expect taxes to increase and 15% fear the controversial debate around a wealth tax as a source of income, could resurface.
The results highlight growing concern among payroll and tax professionals that the burden on remaining taxpayers could intensify.
Emigration Continues to Drain the Tax Base
One of the most significant drivers behind the shrinking taxpayer pool is the continued emigration of skilled South Africans. Data presented during the webinar showed that 61% of individuals ceasing tax residency each year over a four-year period were between the ages of 18 and 44, removing a productive segment of the workforce from the tax base. High-income earners are also increasingly represented among those leaving the country, including individuals earning R2 million or even R5 million annually.
Webinar participants indicated that the trend cannot be attributed to a single cause. According to poll results 59% believe that the decline in taxpayers is driven by a combination of factors, including job losses, lower workforce participation, emigration, and ongoing clean-ups of the SARS taxpayer register.
Jerry Botha, Managing Partner at Tax Consulting and co-presenter, noted that while tax revenue lost from South Africans who emigrate is slightly lower than in earlier years, it still represents a significant leakage from the tax base.
Bracket Creep and Rising Costs Squeeze Employees
Despite inflationary adjustments to tax brackets in the latest Budget, the first such relief in three years, many employees are still feeling the squeeze of bracket creep. Tanya Tosen, Tax and Remuneration Specialist at Tax Consulting and co-presenter, noted that past years’ insufficient adjustments have left employees’ take-home pay under pressure.
When asked whether the Budget measures adequately account for inflation:
- 48% of online participants said the relief partially offsets inflation
- 43% believe employees are still losing purchasing power
SARS Tightens Global Financial Transparency
This intersection between payroll, taxation, and compliance came under the spotlight during the webinar, particularly around offshore income and global financial transparency. As SARS expands its reach under the Automatic Exchange of Information (AEOI) framework, HR, payroll, and remuneration professionals are facing new compliance risks tied to employees’ cross-border income, historical offshore arrangements, and the reporting of executive benefits and allowances.
Polled participants highlighted their top concerns in this regard: 32% cited data matching by SARS, 29% flagged a lack of internal awareness and more than 20% were concerned about employee non-disclosure.
Lifestyle Audits Expand Enforcement
Coupled with proposals allowing 14+ government bodies to conduct lifestyle audits or flag inconsistencies between lifestyle and declared income to SARS, it is clear that rising enforcement and enhanced transparency is now also affecting employers.
More than half of webinar participants believe the expanded data-sharing framework leaves individuals highly exposed to scrutiny, particularly where income and lifestyle does not match. Some 28% indicated that only high-profile individuals face risk.
Botha warned that this development has direct implications for employers regarding benefits such as executive perks, incentive travel, allowances, or offshore remuneration when incorrectly reflected in payroll and tax reporting.
“The only way SARS is going to collect more revenue is by strengthening enforcement. And the legislation we are seeing increasingly reflects this approach,” he said.
The deeper message from the webinar was that dwindling taxpayer numbers and tighter compliance make foresight and proactive planning essential for both employees and employers.
