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While the Budget Review document released alongside Finance Minister Pravin Gordhans' Budget speech shows the recent Voluntary Disclosure Programme has attracted around 18,000 applications and yielded almost one billion rand in additional tax, it has also provided insights into areas of non-compliance that will be receiving focused attention.

Areas that will now be closely scrutinised include: under-declaration of income such as rental and foreign income and capital gains; claiming of excessive income deductions; under-declaration of VAT outputs and inflating VAT inputs; abuse of share incentive schemes by corporate executives; abuse of benefits granted to foreign persons employed in South Africa; and non-payment of PAYE and failure to submit PAYE returns by employers.

"Poor tax compliance is also apparent in respect of trusts and in parts of the construction sector, and the role of tax practitioners and other intermediaries will come under scrutiny," the Budget Review document said.

It said that analysis of compliance among the country’s 34,000 tax advisors showed practitioners owed over 260 million rand in outstanding taxes and have more than 18,000 income tax returns outstanding in their personal capacity.

"If that is their attitude to their own tax compliance, one shudders to think what advice they are giving to their clients," said Finance Minister Gordhan.

Within the trade environment, he said customs officials would continue to focus attention on under-valuation of imports, especially in textiles, using a reference price database which industry is helping to update.

He said SARS had confiscated 3.4 million articles of clothing and footwear in the current financial year worth almost 580 million rand.

Meanwhile, Gordhan said SARS had seized drugs worth 139 million and 682 million sticks of cigarettes valued at 180 million rand.

Since April, he said over 230 taypayers had been successfully prosecuted for a range of tax related offences resulting in sentences totalling 370 years and nearly five million rand in fines. A further 1,500 tax related cases are awaiting prosecution with the National Prosecuting Authority.

Also since April, Gordhan said SARS had issued over 700,000 taxpayers with administration penalties for failing to submit an income tax return on time as required. He said these and other measures have helped to increase the proportion of on-time submissions.

During the most recent tax season, he said SARS received almost five million tax returns, a 23% increase on the previous year.

Go to Budget 2012 Special Report