Dawie Roodt’s reality check for anyone paying tax in South Africa
While higher taxes were not discussed during the recent Medium-Term Budget Policy Statement (MTBPS), the tax burden on South Africa has still increased.
During the recent “mini-budget”, Finance Minister Enoch Godongwana did not mention any new general taxes or changes to the current general tax and VAT regimes.
The only new tax mentioned was the new National Online Gambling Tax, which Godongwana said would be detailed in the 2027 budget.
While the MTBPS is not typically focused on revenue or new tax measures, it is often used as an indicator for future changes.
This year’s speech did not indicate that the Treasury would need to implement new tax measures, but rather suggested that the government had higher-than-anticipated revenue.
This overrun allowed the government to increase its expenditure for the remainder of the financial year by approximately R45.5 billion.
While the MTBPS did not indicate any new taxes for South Africa, Efficient Wealth Chief Economist Dawie Roodt said South Africans are still paying higher taxes.
Speaking to Alec Hogg on Biznews, Roodt said the increased government revenue came from a more aggressive South African Revenue Service (SARS).
This means that, while taxes themselves have not increased, the amount of tax being collected from South Africans has.
“Tax rates are not going up, but the tax take is going up because of a stronger SARS,” Roodt said, also noting that higher commodity prices had given the government a windfall.
He also raised concerns about what a higher tax take could mean for South Africa’s economy, which is already struggling to grow.
“You are reducing the fiscal deficit not by spending less, but by taking more out of the economy,” he said. “In the process, you are increasing the tax burden on the economy.”
In 2025, South Africa’s GDP growth was 1.1%, below that of many other emerging markets, with 2026 economic growth initially forecast at 1.6%.
During the MTBPS, the 2026 forecast was revised downward to 1.2% due to challenging global economic conditions.
Roodt warned that South Africa’s economic growth could be lower than 1.2% for the year and could even fall below 1%.
“The major concern is economic growth of around 1%, and I don’t even think we will see 1%,” he said.
An aggressive SARS
Roodt highlighted that SARS had become more aggressive with its collections recently, leading to the service having higher-than-expected revenue for the year.
By the end of September 2026, SARS said it had collected R15.5 billion, or 1.6%, more than had been anticipated in South Africa’s February budget.
The revenue service attributed this increase to factors such as strong corporate tax and lower-than-estimated VAT refunds.
Roodt warned that higher collections were not a sustainable method for growing tax income, with economic growth necessary to increase government revenue.
SARS echoed Roodt’s sentiment that economic growth is important for increasing government revenue and said it is necessary for sustainable revenue expansion.
“The year-to-date outcome demonstrates the resilience of South Africa’s revenue system,” the revenue service said.
“However, as reflected in the Minister’s speech, sustainable revenue growth ultimately depends on economic expansion, investment, job creation and broad-based compliance.”
While Roodt warned that the increased tax collection could be seen as a higher burden on South Africans, SARS said its increased revenue protected taxpayers.
“Every rand recovered through compliance interventions protects honest taxpayers and strengthens the fiscal framework,” SARS commissioner Johnstone Makhubu said.
“Compliance is one of the most effective tools available to safeguard the integrity of the tax and customs ecosystem.”
In the MTBPS, Godongwana said tax revenue is expected to increase by 6.1%, which Makhubu said was a challenge SARS would meet.
“The Minister has challenged all 14 500 SARS employees to make every effort to collect the resources needed to make South Africa work,” he said. “I am confident that Team SARS will answer the nation’s call.”
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