21 May 2025 – The South African Revenue Service (SARS) recognises the funding challenges that the country faces. We are steadfast in our commitment to serve the nation with integrity and efficiency. SARS plays a vital role in the collection of revenues that support the delivery of public services. We accept the responsibility to achieve the 2025/26 revenue estimate presented by the Finance Minister Mr Enoch Godongwana.
The Minister, in his Budget Speech today, announced the 2025/26 financial-year revenue estimate of R1.986 trillion. This revenue estimate comes against the backdrop of SARS’s final unaudited revenue outcome for 2024/25, which is R1.86 trillion, R8.9 billion more than the Revised Estimate.
2025 Budget Overview.
It is worth noting there are key shifts in the global economic assumptions, which has seen a downward revision by the International Monetary Fund such as the global economic growth outlook of 3.3% to 2.8%. The global revision has a direct effect to the local economic assumptions for 2025/26 that speaks to lower nominal GDP, as well as the Consumer Price Inflation against March Budget 2025.
Nominal GDP for 2025/26 has been revised downwards to R7.87tr (+6.3% y/y) from the reported R8.00tr (+7.0% y/y) in the Budget 2025 and R8.02tr (+6.5%) in the MTBPS 2024. In real terms, the economy is projected to grow by 1.5% in 2025/26, down from 1.9% and 1.6% in Budget 2025 and the MTBPS 2024 respectively. The downward revised outlook reflects a weak outlook for major trading partners and low potential growth amid escalating trade tensions, financial market adjustments, and a highly unpredictable environment. Additionally, the outlook is reflective of persisting domestic economic structural issues, such as integrated logistical network limitations.
Given the current tough domestic and global economic conditions, the R1.986 trillion revenue estimate is a challenging estimate. The estimate announced by the Minister imposes the responsibility on SARS to implement revenue raising initiatives. Debt collection is one such, therefore SARS will specifically accelerate work on collecting all debt, with a specific focus on undisputed debt. SARS acknowledges South Africa’s economic difficulties and the effect that this will have on the aggregate amount of debt collected.
The mandate of SARS is anchored on revenue collection, compliance enhancement and the facilitation of legitimate trade. Importantly, this encompasses analysis of the economic performance and how such performance will impact tax and customs revenue collections. By dutifully implementing its compliance programme, SARS is well positioned to collect all revenue due to the fiscus.
In implementing the compliance programme, SARS moves from the premise that taxpayers are honest and want to be assisted to meet their legal obligation. To do so, SARS provides clarity and certainty to taxpayers to meet their obligations and to make it easy and seamless to transact with the organisation. Where necessary, SARS enforces legal obligations responsibly.
Fiscal citizenship, and our country’s sovereignty to determine our own destiny, requires that we work to mobilise domestic resources to fund our priorities. SARS’s legal mandate enables the government to fund essential services. These services sustain the most vulnerable among us, putting children through school, paying pensions, disbursing child grants, and cushioning the unemployed.
While SARS strives to give legal clarity, it upholds the rights of taxpayers to exercise those rights in law as well. These rights inter-alia include asking for payments to be deferred or paid in instalments, or to dispute the debt. Undeniably, the path ahead will be challenging as we seek to encourage taxpayers to voluntarily settle their outstanding debt and returns. SARS urges taxpayers to work with us in settling outstanding debt. We also assure those taxpayers who are compliant that we will use all legal instruments to share the tax burden fairly by addressing non-compliance.
In the financial year 2024/2025, SARS helped to mitigate a stubbornly high unemployment rate by recruiting and training over 800 new employees to collect debt. This work started with a telephone call and where necessary, included the employment of legal instruments to taxpayers who are indebted to the organisation. This information is based on insights from third party data sources.
SARS has taken valuable lessons from the 2024/25 debt-collection drive. These efforts must result in a minimum collection of R20 billion.
To meet its revised revenue estimate this year, SARS is:
- Refining and using advanced data analytics and artificial intelligence to detect tax-compliance risks, close the tax gap, and improve overall compliance rates. By integrating expanded third-party data sources, such as banking and payroll information, the system can increasingly automate tax assessments and more effectively identify underreported income, thereby strengthening efforts to combat tax evasion.
- Combating the illicit economy, especially in high-revenue sectors such as tobacco, alcohol, and fuel. Through enhanced enforcement against smuggling, counterfeit goods, and black-market transactions, SARS aims to recover substantial revenue losses and deter future non-compliance within these sectors of the informal economy.
- Broadening the tax base by systematically identifying and registering individuals and businesses that have previously operated outside the formal tax system. Targeting the hard-to-tax sectors in the informal economy, particularly small enterprises and self-employed individuals, supports increased revenue mobilisation and helps to reduce reliance on a narrow tax base.
- Closing the tax gap by investing in advanced skills and systems.
SARS Commissioner, Mr Edward Kieswetter said that “the increased revised revenue estimate means that SARS must do more to realise a better life for all South Africans. Indisputably, SARS plays a transformative and catalytic role in funding about 90% of government expenditure, which is essential to the delivery of old age pension grant, health services and the provision of social services without which many of our fellow citizens will be destitute. It is the responsibility we embrace with humility, and we will endeavour to achieve”.
“My sincere gratitude goes to the compliant taxpayers and traders, who have continuously played their part in building our country, Ndza khenza. To all SARS employees, your hard work and perseverance shine bright. The tax revenue you collect is the lifeblood that enables government to build a capable State. I salute you! – he concluded”.
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