By 30 September 2025, SARS recorded net revenue of R924.7 billion, up R78.6 billion from the previous year, and R18 billion above initial estimates. Nearly half of this growth came from stronger compliance efforts, reflecting a positive trend for the months ahead.

Commissioner Edward Kieswetter expressed support for the Minister’s fiscal roadmap, calling it a clear and practical plan for South Africa’s financial sustainability. He noted that SARS remains committed to boosting revenue collection, improving compliance, and facilitating trade through operational excellence and innovation.

SARS’s compliance programme has also delivered encouraging results, securing R131.6 billion from compliance activities—an increase of R9 billion compared to last year. Debt collections rose to R47.1 billion, up by 7.5%. Kieswetter credited the achievement to the dedication of SARS employees and compliant taxpayers, emphasizing their vital role in strengthening South Africa’s fiscal stability.

Revenue performance remained strong across major tax categories, including Corporate Income Tax (CIT), PAYE, Dividends Tax, Domestic VAT, and the General Fuel Levy.

CIT provisional tax payments reached R164.5 billion, growing by 9.5%, while PAYE collections totaled R371 billion—up by R30.9 billion (9.1%) from last year. Domestic VAT collections increased by R21.1 billion (7.8%), driven by solid performances in the finance, retail, and manufacturing sectors.

SARS also noted improvements in VAT refund management and a 5% growth in General Fuel Levy collections, thanks to increased import declarations. However, the agency acknowledged lower collections in some personal income tax categories, partly due to higher refund payments.

Looking ahead, Kieswetter reaffirmed SARS’s focus on building a smart, modern institution anchored in integrity and trust. He stressed that strong domestic revenue collection remains vital to reducing debt and dependence on external funding.

To further support SARS’s efforts, the government has allocated an additional R7.5 billion over the Medium-Term Expenditure Framework (2025–2028). This funding aims to enhance compliance, strengthen operations, and maintain the positive momentum in South Africa’s fiscal outlook.

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Finance Minister Enoch Godongwana will present a third version of the 2025 national budget on May 21, following intense pushback against a proposed VAT hike.

Initially planned to rise from 15% to 17%, the increase was first moderated to 16% before being scrapped entirely due to pressure from coalition partners and public opposition.

The reversal has left a R75 billion revenue gap, forcing the Treasury to explore alternative funding sources or spending cuts to preserve fiscal stability. The revised budget will be tabled against a backdrop of fragile coalition politics and a modest economic growth forecast of 1.9%.

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The ruling was made on Sunday afternoon after discussions between all parties and the judges involved in the case. The court also overturned the parliamentary resolutions that had approved the fiscal framework, which outlines the national budget.

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Although Finance Minister Enoch Godongwana announced on Wednesday that the VAT increase would be reversed, there were questions about whether this was legally possible without Parliament’s approval. The Democratic Alliance argued that only Parliament had the authority to reverse the hike and that immediate action was needed to prevent the increase from taking effect on May 1.

The court’s decision allows time for the necessary legislative process, while leaving the broader legal challenge to the VAT Act itself open for future argument.

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The plan, initially part of the national budget discussions, failed to gain support during negotiations with parties involved in the government of national unity. These talks revealed widespread opposition to the VAT increase, leading to its withdrawal.

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The ANC has been in coalition with the Democratic Alliance and other smaller parties since it lost its parliamentary majority in the May elections, marking a historic shift in the country’s political landscape.

Tensions within the coalition heightened when the Democratic Alliance opposed a key budget bill. Despite this, the bill still passed with help from smaller parties outside the formal alliance.

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With the VAT increase scrapped, Finance Minister Enoch Godongwana now faces the challenge of finding an alternative way to cover a 13.5 billion rand shortfall in the national budget.

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The current standoff revolves around a proposed 0.5 percentage point VAT increase, which several parties, including the DA, oppose. The fiscal framework, a key part of the budget, was passed with the support of parties outside the government of national unity (GNU), such as ActionSA and Build One South Africa (Bosa), under the condition that alternatives to the VAT hike would be explored.

Top ANC leaders, including Gwede Mantashe, Fikile Mbalula, and Gwen Ramokgopa, have been meeting with other political parties in Johannesburg to resolve the deadlock. The ANC is pushing for a new, structured approach, emphasizing the need for a predictable, rules-based system to ensure smooth governance and avoid future surprises during votes.

The ANC has indicated to parties like ActionSA, Al Jama-ah, and the United Democratic Movement (UDM) that it wants to formalize agreements going forward. Mbalula stressed that the ANC is focused on creating a stable system for all parties, not just negotiating with the DA.

The ANC is set to meet with a DA delegation on April 12, followed by talks with the Freedom Front Plus on April 13. Despite disagreements over the VAT increase, the ANC remains committed to the GNU, but has signaled that it will push for a reconfiguration of the coalition to include more aligned parties.

Deputy President Paul Mashatile confirmed that while the GNU faces challenges, these do not signal its collapse, as the agreement involves multiple parties, not just the ANC and DA. The ANC is committed to prioritizing the country’s needs over political conflicts and aims for a more stable and predictable governance model.

The Freedom Front Plus has expressed its commitment to the GNU, as long as it continues to play a positive role. However, the party has warned that it will reconsider its position if non-GNU parties are used to bypass coalition support for key policies.

As the budget process continues, the ANC is focused on securing the necessary support for critical votes, including the Division of Revenue and Appropriation Bills, despite opposition from certain parties.

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A function of Wednesday’s mini-budget was an surprising ‘additional’ R83.5 billion in tax revenues.

FILE: South African Revenue Service (Sars) Commissioner Edward Kieswetter. Picture: @sarstax/Twitter.

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