SARS Welcomes MTBPS as Revenue Collection Surpasses Expectations with R924.7 Billion Haul
Pretoria – The South African Revenue Service (SARS) has thrown its full support behind Finance Minister Enoch Godongwana’s 2025 Medium-Term Budget Policy Statement (MTBPS), highlighting its own strong performance in raking in over R900 billion in the first half of the financial year. In a statement released on Wednesday, SARS revealed it collected a net revenue of R924.7 billion by 30 September 2025, driven by gross collections of R1 157.6 billion minus refund payments of R232.9 billion. This figure beats last year’s tally by R78.6 billion and delivers an R18 billion surplus against initial estimates, setting a positive tone for the rest of the year. Commissioner Edward Kieswetter praised the MTBPS as a pragmatic guide for fiscal health, while crediting SARS staff and honest taxpayers for the results. This boost comes amid broader economic challenges, with the MTBPS revising growth forecasts downward but emphasising reforms to build resilience.
First-Half Revenue Triumph: Key Figures and Surpluses
SARS’s collection efforts have shown real muscle in the first six months of the 2025/26 financial year. The net revenue of R924.7 billion not only outpaced the previous year but also exceeded projections, with nearly half of the surplus coming from stepped-up compliance work. “By 30 September 2025, SARS had collected a net revenue of R924.7 billion, drawn from gross collections of R1 157.6 billion and refund payments of R232.9 billion. This marks year-on-year growth of R78.6 billion and an overall surplus of R18 billion against the printed estimates, indicating a promising trajectory for the second half of the financial year. Nearly 50% of the better than estimated performance came from compliance efforts,” the revenue service stated.
This performance builds on a trend of steady gains, helping to ease pressure on the national budget. The MTBPS itself notes that stronger-than-expected collections have allowed for a R19.7 billion upward tweak in gross tax revenue estimates for the full year, now pegged at R2 005.3 billion up from the original R1 985.6 billion in the February 2025 Budget. Over the medium term, gross tax revenue is forecast to grow at an average of 1.8% annually from 2025/26 to 2028/29, supporting efforts to narrow the budget deficit and stabilise debt levels below 74% of GDP.
Compliance Programme Delivers Big Wins
A major driver behind these numbers is SARS’s robust compliance drive, which pulled in R131.6 billion in the period – up from R122.6 billion the year before. Debt collections alone hit R47.1 billion, a R3.3 billion (7.5%) increase, underscoring the agency’s role in bolstering the national purse. These gains come from targeted actions like audits, risk assessments, and cracking down on fraud, particularly in high-risk areas such as VAT refunds and corporate taxes.
SARS credits this success to its focus on building a “smart, modern institution” through tech upgrades and better data use. For instance, invoking Paragraph 19(3) of tax laws netted an extra R10 billion from companies in mining and finance. “Behind these numbers are the dedicated SARS employees who perform millions of little things daily, and many compliant taxpayers whose contribution make this success possible. Their commitment is to help to strengthen South Africa’s fiscal outlook and build momentum for the future. These results underscore SARS’ effectiveness in revenue collection and is positive for the country’s fiscal outlook,” said Commissioner Kieswetter.
Breakdown by Tax Categories: Where the Growth Came From
Revenue showed strength across several key areas, though some categories faced headwinds. Corporate Income Tax (CIT) provisional payments reached R164.5 billion, up R14.2 billion (9.5%) year-on-year and R4.7 billion (3.0%) above estimates. Mining firms felt the squeeze from falling prices in palladium, iron ore, and coal, but finance and other sectors helped offset this.
Pay As You Earn (PAYE) collections hit R371.0 billion, growing R30.9 billion (9.1%) and beating estimates by R3.2 billion (0.9%). This was fuelled by payments from finance and community services employers. Budget 2025’s tax tweaks, like no inflation adjustments to PIT brackets, are set to add R16.7 billion over the full year. Two-Pot retirement withdrawals added to this, with R18.2 billion gross withdrawals yielding R5.2 billion in taxable amounts.
Dividends Tax brought in R22.3 billion, surging R5.3 billion (31.0%) and exceeding estimates by R4.6 billion (25.7%), including a one-off R1.4 billion payment from finance, manufacturing, and retail.
Domestic VAT totalled R292.7 billion, up R21.1 billion (7.8%) and R5.2 billion (1.8%) above forecasts, driven by finance, wholesale, retail, and manufacturing, though transport lagged. Import VAT fell short by R3.7 billion due to slower import growth (1.2% vs. expected 5.4%). VAT refunds held steady at R183.9 billion, up just R0.2 billion (0.1%), thanks to tighter controls on fraudulent claims.
General Fuel Levy collections reached R44.7 billion, R2.1 billion (5.0%) higher year-on-year and R2.3 billion (5.3%) above estimates. Fuel volumes grew 2.1% (241.9 million litres), with imports up sharply but local manufacturing down.
These positives were tempered by shortfalls in PIT provisional taxes, assessments, customs, and higher PIT refunds of R32.2 billion (up R4.5 billion or 16.2%, exceeding estimates by R1.4 billion). PIT returns climbed to 7.3 million, with 5.7 million auto-assessed.
Commissioner’s Vision: Integrity, Innovation, and Fiscal Support
Kieswetter backed the MTBPS as a “clear and pragmatic roadmap” for sustainability, pledging SARS’s help through efficient collection, compliance, and trade easing. “The MTBPS sets out bold measures to strengthen the country’s economic resilience. SARS is committed to supporting these objectives by focusing on robust revenue collection, improved compliance and trade facilitation through consistent effort, operational excellence, and innovation,” he said.
He stressed SARS’s broader role: “Our role extends beyond revenue collection; we advance national fiscal goals in the face of persistent challenges such as debt, unemployment, and inequality. With government depending on tax revenues for around 90% of expenditures, strong domestic resource mobilisation is essential to safeguard fiscal integrity and reduce reliance on external funding.”
Economic Context and Medium-Term Projections
The MTBPS unfolds against a backdrop of modest growth, with GDP forecast at 1.2% for 2025, down from 1.4%, due to early-year weakness and global slowdowns. Medium-term growth averages 1.8%, supported by reforms in energy, logistics, and infrastructure. Inflation easing to a new 3% target could lower borrowing costs, aiding recovery.
Revenue projections show gross tax revenue at R1 603.7 billion for 2025/26, rising to R1 845.7 billion by 2029/30, with annual growth of 3.6%. PIT grows to R482.6 billion by 2029/30 (3.9% AAGR), CIT to R568.7 billion (3.9%), VAT to R388.4 billion (3.7%), and fuel levies to R167.4 billion (4.6%). Non-tax revenue includes dividends and surpluses.
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