Customs

On 1 April 2026, the South African Revenue Service (SARS) issued the following media release:

SARS has collected R2,010 trillion, surpassing the R2 trillion in net revenue collection for the 2025/26 financial year and crossing a historic milestone after three decades. Over the past seven years, revenue collections have grown at a Compound Annual Growth Rate (CAGR) of 5.8%, with a tax-to-Gross Domestic Product (GDP) ratio of 25.9%, and a tax buoyancy ratio of 1.70. Since 1997, R25.1 trillion has been collected, of which R11.5 trillion was collected in the last seven years. This was achieved despite the most daunting challenges posed by the ravaging COVID-19 pandemic, load shedding and a sluggish economy.

The improved revenue collections result is R24.7 billion higher than the estimate a year ago, as announced by the finance minister in the National Budget 2025. This achievement reflects the focused and attentive work of SARS in its compliance initiatives, improved administrative efficiencies and a marginal contribution from the mining sector. The revenue collection enabled the finance minister to avoid an additional Value-Added Tax (VAT) increase for the nation, as he had originally communicated.

The SARS Commissioner emphasised that “collecting over R2 trillion is not an accident, but the outcome of the more than 14,500 employees who diligently perform millions of activities meticulously to achieve this record collection. Every rand not only helps build a capable state that honours the social contract but also enables the state to deliver for all South Africans and strengthen the fiscal integrity of South Africa”.

As of 31 March 2026, SARS collected net revenue of R2,010.3 billion over the previous fiscal year, representing 8.4% growth, surpassing the 5.4% nominal GDP growth.

When the revised revenue estimate for the 2025/26 financial year was set, it required year‑on‑year revenue growth of R151.7 billion (8.2%). SARS continues to demonstrate discipline and consistency in execution. This has led to revenue maximisation, improved voluntary compliance, and facilitated legitimate trade. This figure shows the sustained resilience of SARS’ revenue performance over recent years, which augurs well for our fiscal health.

These results have been achieved despite the challenges of a sluggish economy, geopolitical tensions, global supply-chain disruptions and the proliferation of the illicit economy.

By the end of March 2026, several major tax types recorded surpluses, boosting overall revenue performance:

• Domestic VAT collections were up 7.6% year-on-year. R291. 4 billion (48.2%) was paid by large business vendors. In comparison, R312.6 billion (51.8%) was contributed by non‑large vendors, predominantly within the finance sector. Assumptions for domestic VAT growth were 5.3% at Budget 2025, 6.8% at the Medium-Term Budget Policy Statement (MTBPS) and 7.0% at the National Budget 2026, with actual performance exceeding earlier expectations. Growth was supported by improved consumer sentiment, lower interest rates that eased borrowing conditions, contained inflation and withdrawals under the two‑pot retirement system. In addition, R37 billion in cash was collected through targeted SARS compliance interventions. The VAT Voluntary Compliance Index improved markedly, increasing from 66.59% to 67.19%, signalling stronger year-on-year compliance behaviour.
• Corporate Income Tax (CIT) provisional tax collections amounted to 5 billion, delivering 9.9% year‑on‑year growth and falling short of the revised estimate by R1.3 billion. Growth was broad‑based, with large companies expanding by 7.5% (R16.1 billion). At the same time, Small, Medium, and Micro Enterprises (SMMEs) recorded stronger growth of 14.7% (R16.0 billion). The assumption for net CIT (excluding interest) was 6.3% in the National Budget 2025, 7.7% in the MTBPS, and 8.7% in the National Budget 2026.

These surpluses were partially offset by deficits in key tax types, reflecting uneven economic conditions and specific sectoral pressures.

• Imports rose slightly by 0.1% in 2025/26. As a result, Import VAT increased by R5.6 billion (2.2%). Still, it was below estimated, while import duties grew by 1 billion (6.6%), exceeding estimates by R1.2 billion (1.5%). Growth was mainly due to passenger vehicles. These trends suggest a market recovery, possibly helped by easier monetary policy and improved consumer sentiment.
• Pay as you Earn (PAYE) collections recorded growth of R59.9 billion (8.5%) versus the previous year and exceeded the revised estimates by R4.0 billion (0.5%). PAYE benefited from modest nominal wage growth combined with fiscal drag (from the non‑adjustment of Personal Income Tax (PIT) brackets and rebates) despite low employment growth. Additionally, revenue resulted from Two-pot PAYE collections totalling R11.0 billion, slightly below last year’s R11.9 billion.
• VAT refunds amounting to 1 billion were paid, reflecting year‑on‑year growth of R5.6 billion (1.5%). Growth assumptions for VAT refunds were revised down from 5.4% at Budget 2025 to 1.6% at Budget 2026. The largest refunds were paid to the mining, finance and manufacturing sectors, driven mainly by export activity and rising local input costs. Preliminary analysis indicates that SARS prevented an estimated R75.0 billion in leakage through focused syndicated crime investigations, investigative audits and verification processes.

Despite these efforts, a significant threat to optimal revenue collection remains. The illicit economy continues to drain the country’s resources, distort competition and undermine public confidence in the tax system. Activities such as smuggling, customs and excise fraud, under‑declaration, counterfeit trade, fuel and tobacco syndicates and organised tax crime divert resources away from essential public services and place compliant taxpayers and legitimate businesses at a disadvantage. SARS estimates that the fiscus loses well over R100 billion in revenue each year to the illicit economy.

“People who buy illicit goods often believe they are getting a bargain,” the SARS Commissioner said. “In reality, they are funding the destruction of legitimate businesses and jobs, shrinking the country’s tax base, and weakening the very institutions meant to serve them.” The SARS Commissioner stressed that every illicit transaction deprived the fiscus of revenue needed for schools, hospitals and public infrastructure. “There is no such thing as a cheap deal in the illicit economy, and the real cost is paid by society at large. We will not allow criminal syndicates to hollow out the tax system. SARS, working with other law-enforcement agencies, is determined to disrupt, dismantle and shut down illicit trading networks, and to make non‑compliance hard and costly.”

Voluntary compliance remains central to inculcating a culture of fiscal citizenship, strengthening SARS and safeguarding the integrity of the tax and customs system. Although most taxpayers comply voluntarily, deliberate non‑compliance and organised criminal activity persist, undermining the integrity of the tax system.

Key compliance drivers during the year included:

• Debt cash collections.
• Preventing impermissible and fraudulent refund claims.
• Voluntary disclosure interventions to regularise tax affairs.
• Countering syndicated tax and customs crimes, valuation fraud and customs seizures.
• Applying data science and AI to identify and mitigate compliance risks to safeguard the fiscus.

By the end of March 2026, a preliminary R316.39 billion was secured from identifiable compliance activities, comprising R164.59 billion in cash collections and R151.81 billion in leakage protection. This compares with R304.04 billion secured in the previous year, yielding year‑on‑year net growth of R12.4 billion (4.1%). Compliance revenue efforts accounted for 15.7% of net revenue collections, down from 16.4% in the previous year.

Enhanced debt‑collection initiatives further strengthened compliance outcomes. During 2025/26, debt collections amounted to R110.9 billion, while targeted Voluntary Disclosures (VDP) compliance initiatives supported a broader and more sustainable revenue base, delivering R6.8 billion.

Over the past seven years, SARS has substantially implemented the Nugent Commission and aligned its reforms with the recommendations of the Davis Tax Committee, using tax-gap analysis and targeted interventions to identify high-risk areas and fix systemic weaknesses.

Today, SARS is formally sharing Modernisation 3.0 with the public. We envisage a future in which taxpayers and their representatives will be provided with a Unique Digital Identity that uses biometric and two-factor authentication to secure all interactions with SARS. This will empower taxpayers to have a comprehensive view of all their accounts with SARS, enabling them to change and update their status and pay as needed. This process will encourage self-reliance. Similarly, an empowered SARS officer will have access to the system and could advance and resolve taxpayers’ problems. This system will be undergirded by an instant payment system supported by the South African Reserve Bank, which will gradually reduce the amount of cash in circulation.

Also central to Modernisation 3.0 is an intelligent case-management system that will automate routine work, leverage big data and apply AI to foster voluntary compliance. Ultimately, the process will modernise the VAT system, enabling automatic VAT assessment. At the same time, customs modernisation will support the no-stop border-post concept involving the whole of Government and strengthen our work with Border Management Agencies.

Modernisation 3.0 builds on the impressive work of SARS Auto Assessment, thanks to which more than 6 million taxpayers did not have to do anything if satisfied with their automatic SARS tax assessment. This is the manifestation of the ideal world in which taxes just happen.

Since its inception in 1994, SARS has collected R25.4 trillion in net tax revenue. Revenue collections have increased from R114 billion in 1994/95 to more than R2 trillion in 2025/26. SARS has remained inextricably linked to our 32-year-old democracy. The link speaks to the fundamental role SARS plays in discharging its legal mandate, as well as its “higher purpose” to serve the well-being of South Africans. The organisation continues its journey to become a reimagined, smart, modern SARS that is trusted and admired by all, anchored in its strategic intent to foster voluntary compliance.

Although progress has been substantial, SARS recognises that further gains are possible. Continued engagement with taxpayers and traders remains essential to sustaining voluntary compliance, trust and long‑term revenue growth. SARS is applying technology, machine-learning algorithms, agentic AI and sophisticated data science to improve taxpayers’ and traders’ compliance and improve service experience, where the “best service is no service at all” and “tax just happens”, as witnessed by more than 6 million taxpayers last year who were auto-assessed.

The SARS Commissioner reflected on these achievements as his tenure came to an end. “As I come to the end of the seven years of national service, I recall the President’s challenge to those who cared about the future of South Africa and the generations to come to step forward, to leave behind a comfortable life of retirement and take their place at the forefront of the struggle where real change happens. It was a call to service, a call to restore credibility and the capability of our damaged institutions, succinctly captured in the call Thuma Mina.”

“I want to thank the President, the minister and all South Africans for affording me the rare privilege to make my humble contribution to the well-being of our country and its people. I am filled with immense pride that, thankfully, together with the help of the people at SARS, we have given our best to the nation.”

“The record achievement we reached today is because of all compliant taxpayers. I want to thank them for their fiscal citizenship and contribution to help the most vulnerable in our society,” the SARS Commissioner said. 

“The 14,500 SARS employees are the mainstay of our organisation, the true heroes and heroines of the work we perform. I salute all of them and express my sincerest gratitude for their unstinting support over the past seven years.”

Short-term relief measures to address fuel price increases

On 30 March 2026, the National Treasury and the Department of Mineral & Petroleum Resources issued a joint media release regarding the escalation of conflict in the Middle East, which has materially increased risks to global energy markets and placed significant upward pressure on domestic fuel prices. Recent data from the Central Energy Fund Group suggests historically high fuel price increases from April 2026 onward. Consultations have been held between the National Treasury and the Department to explore measures to provide short-term relief to consumers, while maintaining a stable and sustainable fuel supply system. 

The agreed approach consists of an immediate intervention for the next month, and a broader package of measures to support households and key sectors of the economy.

The key proposals are outlined below: 

Phase 1: A temporary reduction in the general fuel levy and addressing fuel security concerns:

a. The finance minister proposes that the General Fuel Levy (GFL) be temporarily reduced by R3 per litre from Wednesday, 01 April 2026, to Tuesday, 05 May 2026. This will reduce the GFL on petrol from R4.10 per litre to R1.10 per litre, and on diesel from R3.93 per litre to R0.93 per litre, for one month. These amounts exclude other levies such as the Road Accident Fund (RAF) Levy and the Carbon Fuel Levy. 

b. It is estimated that the partial reduction in the Fuel Levy will cost around R6 billion in foregone tax revenue for one month. The relief measure will be re-evaluated monthly for the next two months. 

c. The relief measure is designed to be fiscally neutral, and the Government will implement mechanisms to recoup the foregone revenue within the fiscal framework approved during the 2026 National Budget. 

d. In reaching this decision, the finance minister sought to balance the socioeconomic impact on the country and welfare impact on South African consumers, specifically regarding food and transport inflation, with the fiscal objectives announced in the February 2026 National Budget. 

e. Government further wishes to assure the public that there is sufficient fuel supply in the country to meet current and projected demand. Reports of shortages in certain areas are largely due to localised distribution and logistical challenges driven by panic buying, rather than a lack of national fuel stocks. They are expected to self-correct in the coming days. Motorists and businesses are encouraged to purchase fuel responsibly and avoid unnecessary stockpiling.

2. Phase 2: Broader package of measures: 

a. The mineral and petroleum resources minister will continue work to review fuel pricing over the medium term. 

b. Work is under way on a broader package of measures to support households and key sectors of the economy. Further details on additional support measures will be announced in due course. 

Government remains committed to balancing economic sustainability with the need to protect consumers.