SARS Strengthens Tax Compliance and Modernization with R7.5 Billion Allocation

During the 2025 Budget Speech on Wednesday, Minister of Finance Enoch Godongwana emphasized the importance of broadening the tax base and improving the administrative efficiency of SARS.

The South African Revenue Service (SARS) has been allocated R3.5 billion in the current financial year, with an additional R4 billion over the medium term, as part of the government's effort to enhance tax compliance and modernize revenue collection processes.

During the 2025 Budget Speech on Wednesday, Minister of Finance Enoch Godongwana emphasized the importance of broadening the tax base and improving the administrative efficiency of SARS. He noted that these efforts would ensure a fairer distribution of the tax burden, increase compliance, and enhance revenue collection.

With the allocated budget, SARS is set to leverage cutting-edge technology, data science, and artificial intelligence to streamline tax administration and curb fraudulent activities by criminal syndicates. These advancements will improve efficiency, transparency, and tax compliance across various sectors.

Addressing Tax Evasion and Enhancing Compliance

SARS has reported a substantial increase in undisputed tax debt owed to the state, amounting to billions of Rands. Additionally, the agency has identified 156,000 taxpayers who are either unregistered or have failed to file their tax returns despite engaging in significant economic activities.

Minister Godongwana urged all South Africans to comply with tax regulations, stating: "I thank all compliant taxpayers who pay their fair share of taxes. I also encourage those that are not compliant to do the right thing. The rewards of higher tax compliance and efficiency take time, but the investments we make today in SARS will enable long-term improvements."

Technological Innovations in Tax Administration

Over the past five years, SARS has made notable strides in modernizing its systems by adopting digital platforms and automating processes to enhance service delivery, detect fraudulent activities, and boost compliance. In the 2025/26 financial year, SARS will focus on narrowing the tax gap by improving taxpayer compliance and facilitating trade through advanced technologies.

To enhance operational efficiency, SARS is deploying artificial intelligence and data-driven solutions to simplify tax processes and bolster its single-window platform for taxpayers and traders. Furthermore, the adoption of scanning technologies and intelligent image analysis will expedite inspections at ports of entry, significantly reducing clearance times and enhancing border security.

Modernizing the Traveller Declaration System

A key initiative in SARS' modernization strategy is the enhancement of the traveller declaration system. This system is being upgraded to provide digital services to cross-border travellers and state entities. The improvements aim to reduce illicit financial flows, improve oversight, and mitigate associated risks.

With these transformative initiatives, SARS is positioning itself as a technologically advanced revenue collection agency, ensuring that tax compliance and efficiency remain at the forefront of South Africa’s economic development strategy.