More Than 50,000 Taxpayers Exit the SARS Tax System

The South African Revenue Service has reported that more than 50,000 taxpayers have formally ended their tax residency status in South Africa over the past seven years.

Key Takeaways

• Tax residency data reveals hidden emigration trends: With no formal emigration tracking system in place, SARS tax residency declarations provide one of the clearest official indicators of South Africans leaving the country and disengaging from the domestic tax system.
• Ending tax residency does not end all tax obligations: Individuals who change their tax status may still be liable for South African tax on locally sourced income, and incorrect declarations can trigger audits, penalties and interest charges.
• The fiscal impact extends beyond headcount losses: When taxpayers exit the system, especially higher earners, the state loses a critical source of personal income tax, which directly affects funding for essential public services.

Tax Residency Data Offers Rare Insight Into South Africa’s Emigration and Revenue Loss

This trend highlights a concerning and sustained movement of taxpayers disengaging from the South African tax system and, in many cases, from the country itself over an extended period.

Although tax residency is distinct from nationality, permanent residency, or citizenship, it remains one of the limited official indicators available to government authorities to assess outward migration trends.

Gaps in Official Emigration Data and External Estimates

South Africa does not maintain comprehensive official records of emigration, nor does it conduct structured exit surveys to determine why individuals leave the country.

As a result, most migration-related data is sourced externally, including:

• Statistics South Africa population estimates are used to infer local migration patterns
• United Nations migrant stock reports

The latest data from the United Nations suggests that approximately 108,000 South Africans emigrated between 2020 and 2024, with just over one million South Africans currently living abroad.

In contrast to these external sources, the SARS data provides a more formal record of taxpayers who have either severed or are in the process of severing their tax ties with South Africa, offering a clearer view of the scale and fiscal implications of this trend.

Tax Residency Rules, Compliance, and Revenue Implications

It is important to note that an individual can remain a South African citizen while being tax resident in another country, or even in multiple jurisdictions.

Tax and emigration specialists often point out that individuals who emigrate but retain assets in South Africa may still be liable for tax obligations in the country.

Changing tax residency status must be:

• formally declared to SARS, and accurately reflected on an individual’s annual tax return

From the 2017 tax year, individuals were required to indicate their tax residency status on the ITR12 tax return, although they were not required to specify the exact date on which their status changed.

From the 2021 tax year onwards, individuals must disclose the precise date on which they ceased to be tax resident in South Africa on their ITR12 tax return.

SARS may request supporting evidence, such as:

• foreign tax residency certificates
• proof of permanent relocation

Emigration and changes in citizenship status are processed separately through the Department of Home Affairs.

However, regardless of whether an individual emigrates or merely changes their tax residency, the outcome for South Africa is the same: a reduction in the domestic tax base and potential loss of revenue.

Shifting Demographics Among Departing Taxpayers

The data points to notable demographic changes among taxpayers who are altering their tax residency status.

Between 2015 and 2020, higher-income earners, particularly those with taxable income above R500 000, were the main drivers of changes in tax residency. However, this pattern weakened between 2020 and 2024, indicating a shift in the profile of individuals disengaging from the South African tax system.

Global travel restrictions during the pandemic delayed relocation plans for many high earners, temporarily slowing formal changes in tax residency.

At the same time, a growing share of taxpayers in the zero to R70 000 income bracket have been changing their residency status, signalling that younger or lower-income individuals are also increasingly leaving the country or restructuring their tax affairs. Younger workers, in particular, tend to be more mobile and responsive to international employment opportunities.

SARS data shows that the number of taxpayers changing residency within the zero to R70 000 taxable income bracket declined by 31.1%, falling from 27,561 to 18,986 in the latest reporting period. This was followed by a 19.7% reduction in the number of taxpayers in the taxable income bracket above R500 000.

Taken together, the figures suggest a broad-based shift that affects both current and future contributors to South Africa’s tax base.

Conclusion

Tax residency data has become a crucial tool for understanding both migration patterns and their fiscal consequences for South Africa. The steady number of taxpayers formally ending their tax residency points to a sustained outflow that extends beyond physical relocation and directly affects the country’s revenue base. While changing tax status does not necessarily sever all tax obligations, it does reduce the pool of contributors to personal income tax, one of the government’s most important funding sources. Over time, this erosion of the tax base places increasing pressure on remaining taxpayers and underscores the need for policies that address both taxpayer retention and broader economic confidence.