SARS accepts the Revenue Estimate for the 2024/25 Fiscal Year
The South African Revenue Service (SARS) has revised its 2025 revenue estimate to R1.846 trillion, up from the R1.841 trillion projected in the 2024 Medium-Term Budget Policy Statement (MTBPS). While this reduces the shortfall from the February 2024 estimate (set at R1.863 trillion), the economic landscape remains challenging.
Key Takeaways for Accountants
Higher Tax Revenue Expected – Despite tough conditions, the tax-to-GDP ratio is projected to rise to 24.7% (up from 24.5%), thanks to improved tax collection and compliance efforts.
VAT Increase Coming – The VAT rate will increase by 0.5 percentage points annually, reaching 16% in 2026/27. This measure will help boost tax revenue.
Employment & Consumption Taxes Strong – Revenue from employment taxes (PAYE, UIF) and domestic VAT is performing well, supported by stable wages and increased pension fund withdrawals.
Import VAT & Fuel Levy Down – Slower import activity and lower fuel consumption have negatively impacted import VAT (down R4.3 billion) and fuel levy collections (down R15.2 billion).
Mining & Manufacturing Struggles – Corporate income tax (CIT) is down for mining (-28.4%) and manufacturing (-1.6%), due to weak global demand for commodities.
SARS Enhancing Compliance & Technology
The new net revenue estimate for FY 2025/2026 is R2.006 trillion. SARS is ramping up its compliance programs, using data analytics, AI, and machine learning to detect tax crime and boost revenue collection. Accountants and tax practitioners should prepare for:
🔹 More enforcement on outstanding tax debts and unfiled returns
🔹 Increased scrutiny on VAT refunds and corporate tax compliance
🔹 A focus on tackling illicit trade and aggressive tax planning
SARS Commissioner Edward Kieswetter emphasised that tax revenues fund 90% of government spending and called for collective responsibility in compliance.
