Charity groups that fail to prove their legitimacy are being deregistered by the government.
The social development department said 203,279 non-profit organisations (NPOs), voluntary associations and trusts face the risk of deregistration for failing to submit annual reports.
The department has issued 41,787 notices of non-compliance. Of these, 6,221 NPOs have been deregistered for failing to meet their obligations under the NPO Act.
Non-compliant NPOs lose privileges such as tax exemptions, letters of support and funding from government, donors and private institutions.
The provinces with the highest number of non-compliant NPOs, including those intended to assist children, youth, persons with disabilities, older persons and humanitarian relief, are:
- Gauteng 64,221;
- KwaZulu-Natal 36,605;
- Western Cape 20,371;
- Limpopo 19,982;
- Eastern Cape 19,202;
- Mpumalanga 15,102;
- North West 12,363;
- Free State 10,661; and
- Northern Cape 4,770.
In April last year, the SA Revenue Service voiced concern over the level of tax abuse and low compliance in tax-exempt institutions, some of which were being used as vehicles for tax crime. It rejected R1bn in claims presented as donations in the 2023/24 financial year.
The social development department said the deregistration process followed a notice issued in August 2023 which was accompanied by targeted workshops and outreach programmes to assist organisations to meet compliance requirements.
The enforcement of the NPO Act also aligns with a Financial Action Task Force (FATF) recommendation which addresses risks related to money laundering and terrorist financing in the sector. The FATF plenary in November 2023 recognised SA’s progress in addressing compliance deficiencies, and the country is set to report back on outstanding issues in an evaluation this year.
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