Tens of thousands of businesses are in the regulatory crosshairs of the SARS due to their VAT registration status.

The businesses have not been complying with SARS’ mandatory VAT registration regulations regarding annual revenue over a certain threshold.

The information was revealed in a written response to a recent Parliamentary question directed to the Ministry of Finance specifically about the number of foreign-owned businesses that were complying with tax regulations, says The Citizen.

The Ministry said neither SARS nor National Treasury kept nationality-specific taxation stats, with activists stressing the focus on nationality was stoking xenophobic flames.

It said SARS was aware of at least 48 773 taxpayers operating small businesses and spaza shops that met the revenue threshold, but were not VAT registered.

It added that 11 988 were identified and forcibly registered during the 2025/26 financial year, collecting an additional R500m.

Gauteng and the Eastern Cape had the highest number of businesses forced to comply, with 87% of forced new registrations.

The Ministry said it used information from other government departments, third-party data from banks and service providers and point-of-sale data to track non-compliance.

SARS also tracked compliance via audits, reviews and field visits to high-risk sectors and suburbs.

The question was posed by the MKP's Carol Mafagane, who asked if the Ministry could verify the number of foreign-owned businesses that were VAT registered, how many spaza shops were foreign-owned, how many compliance inspections were conducted and what was being done to ensure foreign nationals were complying with tax.

‘SARS does not apply different tax registration or compliance requirements based on nationality and does not maintain VAT registration data disaggregated by the nationality of business owners,’ said the Ministry.

Full report in The Citizen