South Africa tax agency falling short on extra collections ambition

Source: Reuters.

The South African Revenue Service (Sars) has collected approximately R39.3bn so far this fiscal year, surpassing the R37.5bn needed to meet its baseline goal of R100bn, which the debt collection agency achieved in the 2024/25 fiscal year.

However, the collections fall short of the R49.3bn needed to stay on course for the higher target aimed at easing fiscal pressures.

Finance Minister Enoch Godongwana has warned that spending cuts may be unavoidable if revenue fails to meet expectations.

Earlier this year, Godongwana said exceeding the target could eliminate the need for an additional R20bn in taxes planned for 2026/27, as the government seeks to contain debt projected to peak at 77.4% of GDP.

Political resistance to tax increases has posed challenges for the minister, who has prioritised maintaining fiscal credibility amid South Africa's economic strains. Sars's published figures include monthly cash collection profiles to track progress against targets.

Godongwana will present the nation's medium-term budget policy statement in November.