SARS targets R2.144 trillion revenue collection after R17.1bn upward revision

The South African Revenue Service (SARS) says it is prepared to meet the revised revenue collection estimate of R2.144 trillion for the 2026/27 financial year, following an upward adjustment of R17.1 billion from the February Budget forecast.

The revised estimate was announced by Finance Minister Enoch Godongwana during the Medium-Term Budget Policy Statement (MTBPS), with SARS Commissioner Johnstone Makhubu welcoming the target.

The new projection raises the revenue estimate from R2.127 trillion, despite a downward revision in South Africa’s real gross domestic product (GDP) growth forecast from 1.6% to 1.2% for 2026.

SARS said it collected R992.2 billion in net revenue by 30 September 2026, comprising gross collections of R1.231 trillion and refunds of R239.1 billion.

The net revenue outcome was R15.5 billion, or 1.6%, above the February Budget estimate and R67.4 billion, or 7.3%, higher than the same period last year.

The performance was supported by stronger Corporate Income Tax, Domestic Value-Added Tax (VAT) and Pay-As-You-Earn (PAYE) collections, alongside lower-than-expected VAT refund payments.

“The year-to-date outcome demonstrates the resilience of South Africa’s revenue system. However, sustainable revenue growth ultimately depends on economic expansion, investment, job creation and broad-based compliance,” Makhubu said.

The revenue authority said compliance interventions secured a preliminary R137.7 billion during the first six months of the financial year.

This included R76.3 billion in direct cash collections and R61.3 billion in prevented revenue leakage.

Makhubu said compliance measures remained essential to protecting honest taxpayers and strengthening the country’s fiscal position.

Despite the strong first-half performance, SARS said meeting the revised target would require sustained collection efforts during the remainder of the financial year.

Revenue in the second half of 2026/27 is expected to increase by R66.3 billion, or 6.1%, with PAYE, Corporate Income Tax and Domestic VAT expected to be the main contributors.

The revised second-half estimate stands at R1.15 trillion, up R1.6 billion from the previous projection.

SARS attributed the adjustment largely to an improved Corporate Income Tax outlook, supported by an upward revision in projected gross operating surplus growth from 3.5% to 5.4%.

The outlook also reflects stronger projected household expenditure and import growth, which are expected to support VAT and customs duty collections.

The agency warned that economic risks, including geopolitical tensions, supply chain disruptions and rising energy prices, could affect revenue performance.

It also noted that the revenue outlook excludes the fuel levy relief announced by the Finance Minister, which is intended to ease pressure on consumers amid rising fuel costs.

SARS said it accepted the revised collection challenge and remained committed to collecting all revenue lawfully due, strengthening compliance and facilitating legitimate trade.

“The fiscal position demands disciplined execution across the organs of state and a capable, trusted revenue authority that fulfils its mandate firmly, without fear, favour or prejudice,” Makhubu said.

He added that SARS employees had been challenged to help mobilise the resources needed to support government spending, public services, infrastructure development and South Africa’s broader social and economic development.

The commissioner expressed confidence that the revenue service’s 14,500 employees would rise to the challenge, while thanking compliant taxpayers and traders for their contributions.