The South African Revenue Service (Sars) collected a record gross revenue of R2.303 trillion for the 2024/25 fiscal year, exceeding expectations by nearly R8.8 billion, a day before parliament votes on the National Budget.
Sars Commissioner Edward Kieswetter hailed the outcome as a testament to the agency’s efficiency, noting that it collected R114bn more than the previous year’s R1.741trl.
“I am pleased that the R447.7 billion returned into the hands of taxpayers is good for the economy,” Kieswetter said, referencing the highest-ever refund payout, up 8.2% from R413.9 billion in 2023/24. However, he said he remained "deeply concerned about the ever-present threat of refund fraud and abuse of the system". This as Sars thwarted R146.7bn in impermissible refunds.
The net revenue of R1.855 trillion reflects a tax-to-GDP ratio of 24.8%, with a tax buoyancy ratio of 1.20, signalling revenue growth outpacing the economy’s nominal gross domestic product (GDP) rise of 5.4%.
This performance comes as Finance Minister Enoch Godongwana prepares to table the 2025 Budget, which includes an additional R7.5bn allocation to Sars over the Medium-Term Expenditure Framework to enhance debt collection and combat illicit trade.
Key tax categories drove the gains. Net Personal Income Tax (PIT) grew by 12.6% to R81.8bn, boosted by above-inflation wage increases in the finance and community sectors and R12.9bn from Two-Pot pension withdrawals - far exceeding the projected R5bn. Net Company Income Tax (CIT) rose 2.1% to R6.5bn, led by a 3.3% uptick in provisional tax collections, despite a mining sector downturn. Net Value-Added Tax (VAT) increased by 2.3% to R10.5 billion, with refunds reaching R365.5bn, up 6.6% year-on-year.
The Budget vote on April 2 follows a year of uneven economic recovery, with sectors like finance and wholesale thriving, while imports and exports lagged. The National Treasury had adjusted nominal GDP growth forecasts downward from 5.7% to 5.4% by Budget 2025, reflecting cautious optimism.
Godongwana’s Budget is expected to prioritise fiscal stability, with Sars tasked to collect R2.006trl in 2025/26.
"This conveys confidence by the Minister on SARS’s ability to meet this challenge. We will spare no efforts in rising to this challenge," said Kieswetter.
Compliance efforts yielded R301.5bn, a 15.8% increase, aided by artificial intelligence and data analytics to curb fraud.
“Sars believes that taxpayers are honest and want to be helped to meet their obligation,” Sars said, noting a rise in voluntary compliance indices across PIT, CIT, and VAT.
Looking ahead, the tax body said it was collaborating on several projects amongst other, a unique digital identity for individuals and entities and a common portal ensuring data integrity segregation based on mandates of agencies.
" We will also look at a common payment platform with e-invoicing and this will reduce the volume of cash in the system as well as a common disbursement platform to replace the disparate payment platforms. Sars, subject to funding and appropriate support is ready to lead these initiatives since they are critical to our and other government departments success," it said.
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