The South African Revenue Service (SARS) has been granted an additional R4 billion over the medium-term to strengthen its capacity in revenue collection, Finance Minister Enoch Godongwana announced yesterday during the tabling of the 2025/2026 budget in Parliament.

This allocation supplements the R3.5 billion previously assigned in the 2024 Medium-Term Budget Policy Statement. The funds will be directed towards enhancing SARS’ capabilities in technology, data science, and artificial intelligence (AI) to improve tax compliance and recover outstanding debt.

SARS Commissioner Edward Kieswetter emphasized that the additional funding would allow the revenue service to intensify its debt recovery efforts. He revealed that SARS had already hired 500 contract employees, with plans to bring on an additional 250 in June, eventually scaling up to 1,700 staff dedicated solely to debt collection.

Kieswetter cited last year’s success, where SARS ring-fenced R300 million of its additional budget and collected R25 billion in outstanding debt. This year, he projected that SARS could recover between R20 billion and R50 billion, with Minister Godongwana cautiously estimating R35 billion in additional revenue.

The commissioner highlighted two key areas of focus:

Using advanced data analytics and AI, SARS cross-references data from employers, banks, medical aid schemes, and international financial institutions to detect discrepancies. However, Kieswetter noted that pursuing these cases requires significant resources due to resistance from non-compliant taxpayers.

Despite these efforts, Kieswetter acknowledged several headwinds:

Kieswetter stressed that efficient tax collection could alleviate pressure on the fiscus, potentially preventing future VAT or tax increases. He pointed out that SARS’ improved performance had already contributed to the minister reconsidering a VAT hike.

With a revenue target of R1.98 trillion for 2025/2026, SARS faces a challenging yet critical mandate. Kieswetter assured that the revenue service remains committed to its role in safeguarding South Africa’s fiscal health but warned that success depends on sustained effort and economic stability.

As the nation grapples with economic constraints, SARS’ enhanced capabilities and aggressive compliance drive will be pivotal in ensuring sustainable revenue streams for the government.