Commissioner Edward Kieswetter’s two-pronged approach — assisting those who comply and cracking down on those who don’t — is no longer just rhetoric. SARS is making it clear that time is fast running out for those who have not regularised their tax affairs.
The VDP: A Last Safe Exit
The Voluntary Disclosure Programme (VDP) offers qualified taxpayers a structured, legislated opportunity to correct prior non-compliance. It is not a loophole or workaround, but a legitimate mechanism designed to encourage voluntary compliance before SARS initiates an audit or investigation.
Taxpayers who took this route early have protected themselves from reputational harm, potential financial ruin, and in some cases, criminal prosecution. Those who did not are now facing consequences that include public naming and shaming, civil judgments, and penalties that can reach up to 200% of the original tax debt. In more serious cases, individuals have faced prosecution, with imprisonment as a real possibility.
VDP Process Improved But Not Without Risk
SARS has made the VDP process more accessible for taxpayers acting in good faith. The application system has been digitised and streamlined, turnaround times have improved, and SARS has demonstrated a willingness to engage constructively with applicants — provided the disclosure is made voluntarily and before SARS begins any form of inquiry.
While the process may appear simpler, the legal requirements remain stringent. A taxpayer must be registered, up to date with all tax returns, and the disclosure must be complete and accurate. SARS has successfully invalidated VDP relief where applications were rushed or failed to meet the statutory criteria, leaving those taxpayers exposed to both penalties and potential criminal liability.
Legal Privilege: A Crucial but Missing Conversation
What many taxpayers fail to appreciate is the importance of legal privilege — especially when the risk of criminal sanctions arises. In matters where potential prosecution is on the horizon, engaging a tax attorney ensures that communication and strategy discussions are protected by law.
This privilege does not extend to accountants or consultants. Without it, sensitive disclosures and planning documents could be accessed and used by SARS in subsequent enforcement proceedings.
When the stakes include imprisonment, legal privilege is not a luxury — it’s a necessity.
SARS is Now Faster, Smarter, and Sharper
This new era of enforcement is underpinned by smarter systems and sharper tools. SARS has invested significantly in data analytics, automation, and inter-agency cooperation. Audits are no longer random — they are precise, data-driven and often highly effective.
Once an audit, investigation, or verification commences, the door to the VDP closes. This is not theoretical. SARS has in many cases already executed garnishee orders, asset preservation applications, and criminal prosecutions.
Disclose Before They Come Knocking
The burden of proof lies with the taxpayer. Failure to maintain records, declare all income, or keep tax affairs in order places individuals and businesses at real risk. The VDP is one of the few remaining proactive avenues allowing taxpayers to resolve historical non-compliance, avoid excessive penalties, and protect themselves against criminal liability.
Position Yourself for Protection — With the Right Advisors
It is important to understand that the VDP process is complex. Success often depends on engaging the right advisors — particularly those with a legal background who can offer protection through legal privilege. The right support can ensure a well-considered, compliant, and confidential disclosure strategy, tailored to your specific circumstances.
Act Before It’s Too Late
The message could not be clearer: act now or face the full weight of SARS enforcement. For taxpayers suspecting their affairs are not in order, the window to make a protected, voluntary disclosure is closing quickly.
Once SARS comes knocking, the options become limited — and the consequences, severe.
