The South African Revenue Service (Sars) has committed to accelerating its efforts to recover all debt and to catch tax evaders to increase revenue collection.
This comes after Finance Minister Enoch Godongwana announced a 2025/26 financial year revenue estimate of R1.986 trillion in his budget speech this week.
Sars said it recognised the funding challenges the country faced and was steadfast in its commitment to serve the nation with integrity and efficiency in its role of collecting revenue to support service delivery.
Apart from driving debt collection efforts, the revenue service said it would refine advanced data analytics and artificial intelligence (AI) to detect tax-compliance risks, combat the illicit economy and net individuals and businesses that have previously operated outside the formal tax system.
“We accept the responsibility to achieve the 2025/26 revenue estimate presented by Finance Minister Enoch Godongwana,” the revenue service said in a statement.
Sars described the sum as “a challenging estimate” due to the “tough domestic and global economic conditions”.
National Treasury revised the economy’s growth projections down from 1.9% in March to 1.5%.
“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,” the revenue service said.
“Sars acknowledges South Africa’s economic difficulties and the effect this will have on the aggregate amount of debt collected.”
It said the service’s mandate was 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,” the revenue service said.
Its strategy to meet the revised revenue estimate this year includes:
• Refining and using advanced data analytics and AI 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, 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 Edward Kieswetter added that the increased estimate meant the service 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 grants, health services and the provision of social services without which many of our fellow citizens will be destitute,” he said.
“It is the responsibility we embrace with humility, and we will endeavour to achieve.” – SAnews.gov.za
