SARS
By Natalie Naidoo
The South African Revenue Service (SARS) has been allocated R3.5 billion in the 2025 national budget, with an additional R4 billion earmarked over the medium term to modernise tax collection and enhance compliance. This announcement was made by Finance Minister Enoch Godongwana during the 2025 Budget Speech in Parliament on Wednesday.
Godongwana emphasised that broadening the tax base and improving SARS’ administrative efficiency would allow the government to spread the tax burden more equitably while ensuring sustainable revenue generation.
Government Prioritises Tax Collection and Compliance
With this budget allocation, SARS will focus on leveraging technology, data science, and artificial intelligence (AI) to improve efficiency, transparency, and compliance while combating tax evasion and illicit financial flows.
“By the end of February this year, SARS reported a significant increase in undisputed debt. This means billions of rands are owed to the State. The revenue collector has also detected 156,000 taxpayers who are not registered or have not filed despite their substantial economic activity,” Godongwana stated.
The Finance Minister urged all South Africans to comply with tax laws, adding:
“I call on all South Africans to comply with the law and support SARS in its endeavour to collect the revenues that enable the government to fund and provide critical services.”
He also thanked compliant taxpayers and warned non-compliant individuals and businesses that SARS will take stronger action against tax evasion.
SARS Modernisation: AI, Automation, and Digital Transformation
SARS has made significant progress in modernising its systems over the past five years by shifting to online services, automation, and digital tax filing. The additional budget will further accelerate these efforts, making tax administration more efficient and secure.
According to the 2025 National Treasury Budget Review document, SARS will focus on:
• Addressing the tax gap by improving taxpayer compliance and trade facilitation.
• Using artificial intelligence (AI) and data science to detect tax fraud and boost collection.
• Deploying automation and intelligent image analysis to speed up tax inspections at ports of entry.
• Modernising the traveller declaration system to combat illicit financial flows.
• Enhancing digital tax services to improve efficiency and ease of filing for businesses and individuals.
SARS Commissioner Edward Kieswetter welcomed the funding allocation, stating that enhancing digital tax enforcement will improve revenue collection and prevent fraud.
“This investment allows us to further our efforts in combating tax avoidance and ensuring compliance among individuals and businesses,” Kieswetter said.
SARS to Crack Down on Tax Evasion and Debt Recovery
The increased funding will enable SARS to intensify tax audits and investigations, ensuring that tax evaders are held accountable. The agency has identified a growing number of businesses and individuals failing to declare their full earnings, leading to billions in lost revenue.
Godongwana highlighted three key areas where SARS will focus its enforcement efforts:
1. Non-filing and under-reporting: SARS will target the 156,000 identified taxpayers who have failed to register or declare their full earnings.
2. Taxpayer debt recovery: Increased funding will enable SARS to recover billions in undisputed debt owed to the state.
3. Corporate tax enforcement: The agency will deploy AI-driven audits to identify businesses under-declaring profits and engaging in transfer pricing manipulation.
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