In a landmark achievement for South Africa's fiscal landscape, the South African Revenue Service (SARS) has officially crossed the R2 trillion threshold in net revenue collection for the 2025/26 financial year.
This historic milestone, announced on April 1,2026, reflects a significant leap in the country's economic journey over the last three decades.
An era of rapid growth
The journey to R2 trillion has been marked by an impressive Compound Annual Growth Rate (CAGR) of 5.8% over the last seven years. Of the total of 25.1 trillion collected since the dawn of democracy in 1994, nearly half – R11.5 trillion – was collected in just the last seven years.
This performance is particularly notable as it was achieved despite significant domestic and global headwinds, including the aftermath of the COVID-19 pandemic, persistent loadshedding, and a sluggish global economy.
Key performance drivers
The 2025/26 revenue results outperformed initial budget estimates by R24.7 billion. Several key sectors and tax types contributed to this surplus:
Domestic VAT reached a new high, growing 7.6% year-on-year. This was bolstered by improved consumer sentiment, lower interest rates, and the impact of the “two-pot” retirement system withdrawals.
Personal Income Tax (PAYE) recorded growth of 8.5%, totaling R59.9 billion more than the previous year. This growth was driven by moderate wage increases and “fiscal drag.”
Corporate Income Tax (CIT) saw SMMEs show strong growth of 14.7%, while overall CIT collections grew by 9.9%, slightly missing some aggressive estimates but remaining a pillar of the fiscus.
Compliance & Tech initiatives and SARS's focus on data science and AI resulted in R164.59 billion in cash collections from compliance activities and prevented R151.81 billion in potential revenue leakage.
The shadow economy: A R100 billion threat
Despite the celebration, SARS Commissioner Edward Kieswetter issued a stern warning regarding the “illicit economy.” It is estimated that South Africa losses over R100 billion annually to smuggling, counterfeit goods, and tax syndicates.
“There is no such thing as a cheap deal in the illicit economy,” Kieswetter remarked. “The real cost is paid by society at large… hollowed out by criminal syndicates.”
The future: Modernisation 3.0
Looking ahead, SARS is rolling out Modernisation 3.0, a digital transformation strategy aimed at making tax “just happen.” Key features include a Unique Digital Identity incorporating biometric and two-factor authentication for taxpayers, further Automated Assessments following the success of the 6 million taxpayers auto-assessed this year, and an Instant-Payment System supported by the South African Reserve Bank to reduce physical cash circulation.
A “Thuma Mina” moment
As Commissioner Kieswetter concludes his seven-year tenure, he credited the success to the “14,500 heroes” at SARS and the voluntary compliance of South African taxpayers. The R2 trillion mark is not just a number; it is the fuel for schools, hospitals, and infrastructure that sustains the nation's social contract.