{"id":852222,"date":"2026-02-26T07:00:00","date_gmt":"2026-02-26T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=852222"},"modified":"2026-02-25T20:23:01","modified_gmt":"2026-02-25T18:23:01","slug":"the-r15-billion-hole-that-should-make-taxpayers-in-south-africa-worried","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/budget-speech\/852222\/the-r15-billion-hole-that-should-make-taxpayers-in-south-africa-worried\/","title":{"rendered":"The R15 billion hole that should make taxpayers in South Africa worried"},"content":{"rendered":"\n

While Finance Minister Enoch Godongwana pointed to various tax measures that beat expectations in the past year, experts did not miss the R15 billion shortfall in SARS tax debt collections.<\/p>\n\n\n\n

Delivering his 2026 Budget Speech on Wednesday (25 February), Godongwana pointed to an over-performance in several revenue streams.<\/p>\n\n\n\n

This includes VAT, corporate income tax and dividends tax\u2014all of which performed above expectations.<\/p>\n\n\n\n

However, a major caveat to all the numbers pointing up is a R15\u202fbillion shortfall in SARS’ tax debt collection target<\/strong>.<\/p>\n\n\n\n

Outstanding tax debt stands at R646 billion, of which R518.2 billion is undisputed. SARS only collected R79.4\u202fbillion by 31 January 2026.<\/p>\n\n\n\n

“The primary reasons for this shortfall relate to the scale of outstanding, undisputed tax debt and missed collection targets,” said Marilize De Kock, Senior Manager at Forvis Mazars.<\/p>\n\n\n\n

“This places the tax authority under significant pressure, which will likely lead to a sharpened enforcement posture, coupled with operational enhancements in bank collaboration and legal recovery.”<\/p>\n\n\n\n

Godongwana revised the 2025\/26 revenue estimate upward to R2,006.9 billion, from the MTBPS 2025 estimate of R2,005.3 billion.<\/p>\n\n\n\n

This represents an improvement of R21.3 billion against the Budget 2025 printed estimate of R1,985.6 billion, and of R1.7 billion against the MTBPS 2025 estimate. <\/p>\n\n\n\n

SARS\u2019 compliance efforts as of the end of January 2026 contributed R11.6 billion to this improved outcome, which constitutes 54.5% of the total uplift. <\/p>\n\n\n\n

This comprises cash revenue totalling R7.1 billion, made up of R3.6 billion from debt recovery and R4.5 billion in revenue-leakage prevention. <\/p>\n\n\n\n

SARS said its contribution is projected to be close to R14 billion (65.7%) by year-end.<\/p>\n\n\n\n

SARS is going to go harder<\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

SARS Commissioner Edward Kieswetter said that the revenue service will “spare no effort” to achieve the revised revenue estimate. <\/p>\n\n\n\n

“SARS will align its strategy and operations to sustain its revenue performance and protect the fiscus,” he said.<\/p>\n\n\n\n

Kieswetter, who will retire from the position in April 2026, specifically mentioned pushing up compliance revenue, which includes debt recovery from taxpayers.<\/p>\n\n\n\n

“Over the past six years, compliance revenue has become a defining feature of SARS\u2019 revenue performance and a key contributor to fiscal stability,” Kieswetter said.<\/p>\n\n\n\n

“From R128.4 billion in 2019\/20 to R304.0 billion in 2024\/25, compliance revenue has grown at a compound annual rate of 18.8%.”<\/p>\n\n\n\n

However, while SARS characterises this growth as a result of its modernisation programmes and bringing “certainty and clarity” for taxpayers, tax experts point out that, in practical terms, the taxman is clearly turning the screws on taxpayers.<\/strong><\/p>\n\n\n\n

According to Mandisa Ngomane, Associate Director in Corporate Tax at KPMG South Africa, the bigger tax haul over the past year directly correlates with increased audit activity.<\/p>\n\n\n\n

With a bigger target now set and significant debt outstanding, the screws are going to tighten even more.<\/p>\n\n\n\n

This will be accompanied by “a more uncompromising approach to disputes, including the imposition of penalties, attempts at piercing prescription, and bypassing procedure in some instances, bypassing procedure”.<\/p>\n\n\n\n

Ngomane warned of “indiscriminate reluctance” on the part of SARS to exercise its discretion in favour of taxpayers, even where it is justified to do so. <\/p>\n\n\n\n

“Taxpayers can expect this trend not only to continue but to intensify,” Ngomane said.<\/p>\n\n\n\n

According to Tax Consulting SA, the tax authority\u2019s expanding use of technology and targeted compliance initiatives\u2014particularly in respect of high-net-worth individuals, large businesses, and the digital economy\u2014indicate that SARS’ tax collection efforts are becoming more sophisticated and working.<\/p>\n\n\n\n

However, beyond chasing down more money in the hidden corners of the economy, the group also identified a significant structural risk.<\/p>\n\n\n\n

Specifically, the fact that SARS still relies heavily on a narrow tax base, with a small percentage of taxpayers contributing a disproportionately large share of tax revenue collected by SARS.<\/p>\n\n\n\n

“This reinforces Treasury\u2019s long-standing view that sustainable revenue growth will ultimately depend more on economic expansion and the broadening of the tax base, rather than on increasing tax rates,” Tax Consulting said.<\/p>\n","protected":false},"excerpt":{"rendered":"

SARS’ R15 billion shortfall in tax debt collections likely means that the taxman will be coming after taxpayers even harder.<\/p>\n","protected":false},"author":10,"featured_media":790454,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13716],"tags":[24824,22726,1458,3246,12796],"class_list":["post-852222","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budget-speech","tag-budget-2026","tag-forvis-mazars-south-africa","tag-kpmg","tag-sars","tag-tax-consulting-sa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/852222","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=852222"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/852222\/revisions"}],"predecessor-version":[{"id":852228,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/852222\/revisions\/852228"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/790454"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=852222"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=852222"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=852222"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}