SARS falling short

South Africa’s tax authority is lagging behind projections required to secure an additional 35 billion rand ($2.0 billion) in revenue, data from the National Treasury revealed, though it is on track to meet its 2025/26 baseline target.

The South African Revenue Service (SARS) has collected approximately 39.3 billion rand so far this fiscal year, surpassing the 37.5 billion rand needed to meet its baseline goal of 100 billion rand, which the debt collection agency achieved in the 2024/25 fiscal year.

However, the collections fall short of the 49.3 billion rand 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 20 billion rand 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 prioritized 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.

• Reporting by Colleen Goko.