SA’s tax authority has posted a stronger-than-expected performance for the 2024/25 fiscal year, collecting R1.855-trillion in net revenue — R8.8bn above the most recent National Treasury’s revised estimate of R1.846-trillion.
Delivering the preliminary results on Tuesday, SA Revenue Service (Sars) commissioner Edward Kieswetter said the figure represented 6.6% year-on-year growth, a result achieved despite nominal GDP growth of 4.9%, lower-than-expected wage increases and declining fuel consumption.
“This is, we believe, in the current environment a very credible outcome delivered by Sars,” Kieswetter said.
The tax base currently stands at 33-million, he said. Total gross revenue amounted to R2.302-trillion and Sars paid out refunds totalling R447.7bn.
Personal income tax (PIT) was the largest revenue contributor, rising by 12.6% to R733bn supported by an expanding tax base and improved compliance.
Corporate income tax (CIT) grew just over 2% to R323bn. VAT collections increased 2.3% to R458bn, in line with modest household spending while dividends tax and securities transfer duties rose 9.6%. Sin taxes (alcohol, tobacco and sugar drinks) climbed 11.5% and fuel levy collections declined 6% to R85.8bn from R91.5 bn.
While customs collections grew 8.7% the fuel levy dipped 6.3%.
Kieswetter pointed to lower imports and shifting energy consumption as dampeners on some tax streams but noted that Sars’ broad-based compliance programme and organisational rebuilding efforts helped close the gap.
One of the more telling stories from the 2024/25 tax year came from the rollout of the two-pot retirement withdrawal system.
Sars finalised over 2.5m applications for access to the two-pot money, enabling R47.7bn to be released into the economy. From this, R11.87bn in tax was collected.
“Generally, it is the middle-class families who have dipped their hand into the retirement cookie jar,” said Kieswetter, noting while wealthier individuals made withdrawals they appeared to be more about portfolio management than necessity.
Importantly, just over 645,000 applicants — roughly a quarter — fell below the tax threshold and therefore paid no tax.
Kieswetter described the two-pot solution as a “Goldilocks” balance between immediate relief and long-term savings, helping many families in distress while preserving retirement integrity and limiting future pressure on the state for social support.
While Gauteng remains the engine of national revenue collection, Limpopo recorded the fastest year-on-year tax revenue growth at 17.24%, followed by Mpumalanga at 10.25%, North West at 10.14%, Free State at 10.06% and the Western Cape at 9.7%, highlighting a notable uptick in economic activity across several inland and coastal provinces.
The Northern Cape posted the lowest growth at just 0.38%.
The trend suggests economic activity is beginning to deepen beyond traditional metros, although the actual contribution value remains heavily concentrated in the major provinces.
Sars’ performance, Kieswetter said, is not just about revenue collection — it’s also about rebuilding institutional integrity and public trust.
“Public trust is sacrosanct for the work we do,” he noted. “Our behaviour must be irreproachable. Our integrity must be beyond question, so that people who do not like to part with money do so while knowing that they have been treated professionally and fairly, and that their contribution is towards a cause that is worthy.”
He cited several indicators to support this, including a rise in public trust in Sars from 48% in 2018/19 to nearly 75%, and an improvement in voluntary compliance, which increased from 62.85% to 66.29%.
Taxpayer service performance also rose significantly to 87.13%, up from just under 55% five years ago, while employee engagement improved to 71%.
Kieswetter highlighted that Sars has achieved three consecutive clean audits.
“Tax revenue remains the lowest cost of funding government’s programme. It’s cheaper than borrowing money. It is less impactful than raising taxes, and ultimately it is about spreading the tax base equitably across all those who have a paying obligation.
Despite Sars’ revenue overrun, the fiscal outlook remains fraught. Parliament is scheduled to vote on the 2025 budget on Wednesday, and one of the most hotly contested proposals remains a possible VAT increase.
In a bid to strengthen long-term revenue capacity, finance minister Enoch Godongwana announced in March a R7.5bn allocation over the next three years to support the continued modernisation of Sars.
The investment is intended to upgrade compliance infrastructure, expand the use of artificial intelligence and boost tax recovery efforts — measures aimed at improving collection efficiency and reducing reliance on future tax increases.
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