BUSINESS NEWS - The South African Revenue Service (SARS) has crossed a historic milestone, collecting more than R2 trillion in net revenue in a single financial year for the first time since the dawn of democracy.
SARS announced on Wednesday, 1 April, that it collected R2.010 trillion for the 2025/26 financial year ended 31 March.
The figure is R24.7 billion higher than projected a year ago and represents an 8.4% increase on the previous year.
Revenue growth comfortably outpaced nominal GDP growth of 5.4%, providing some relief to the national fiscus and helping the Minister of Finance avoid a larger VAT increase than originally planned.
Over the past seven years, SARS revenue has grown at a compound annual growth rate of 5.8%. The tax-to-GDP ratio stands at 25.9%, while the tax buoyancy ratio reached 1.70. Of the R25.1 trillion collected since 1997, R11.5 trillion was gathered in the last seven years alone.
Key tax types deliver solid performance
Domestic VAT collections rose 7.6% to R604 billion, beating earlier estimates. Large business vendors contributed R291.4 billion (48.2%), while non-large vendors - mainly in the finance sector - contributed R312.6 billion (51.8%).
Corporate Income Tax (CIT) provisional payments totalled R355.5 billion, up 9.9% year-on-year. SMMEs recorded stronger growth of 14.7% compared to 7.5% for large companies.
PAYE collections increased by 8.5% to R767 billion, boosted by modest wage growth and fiscal drag. An additional R11 billion came from the Two-Pot retirement system.
VAT refunds paid out amounted to R371.1 billion. Through focused compliance work, SARS said it prevented an estimated R75 billion in potential revenue leakage.
Compliance efforts play major role
A total of R316.39 billion was secured through various compliance initiatives during the year - R164.59 billion in actual cash collections and R151.81 billion in prevented leakage. This is R12.4 billion more than the previous year.
Debt collections reached R110.9 billion, while the Voluntary Disclosure Programme contributed R6.8 billion.
SARS Commissioner Edward Kieswetter credited the record performance to the dedication of the organisation’s more than 14 500 employees.
“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,” Kieswetter said.
“Every rand helps build a capable state that honours the social contract and enables government to deliver for all South Africans.”
Illicit economy still a serious concern
Despite the positive results, SARS warned that the illicit economy continues to drain the fiscus of well over R100 billion annually through smuggling, counterfeit goods, fuel and tobacco syndicates, and organised tax crime.
“People who buy illicit goods often believe they are getting a bargain. In reality, they are funding the destruction of legitimate businesses and jobs, shrinking the country’s tax base,” Kieswetter warned.
He said SARS, working with other law enforcement agencies, remained determined to disrupt and dismantle these criminal networks.
Modernisation 3.0 launched
SARS used the occasion to formally unveil its next phase of digital transformation, called Modernisation 3.0.
The initiative includes a Unique Digital Identity for taxpayers using biometric and two-factor authentication, an intelligent case-management system driven by AI and big data, and further automation of VAT assessments and customs processes.
It builds on the success of the Auto Assessment system, which allowed more than six million taxpayers to receive automatic tax assessments last year.
Kieswetter reflects as tenure ends
The announcement comes as Commissioner Kieswetter concludes his seven-year term at the helm of SARS.
He thanked President Cyril Ramaphosa, the Minister of Finance and all compliant taxpayers for their contribution to the country.
“I am filled with immense pride that, together with the help of the people at SARS, we have given our best to the nation,” Kieswetter said.
He paid special tribute to SARS staff, calling them the “true heroes and heroines” of the organisation.
Since 1994/95, SARS has collected a cumulative R25.4 trillion in net tax revenue - growing from R114 billion in its first year to more than R2 trillion in 2025/26.
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