Newly appointed Commissioner Dr Johnstone Makhubu assumes SARS office

Under Kieswetter, SARS achieved sustained revenue growth, expanded audit capacity and re-established itself as a leading tax authority on the African continent.

The South African Revenue Service (SARS) has used Workers' Day to both honour the country's workforce and signal a new chapter in its institutional evolution, as newly appointed Commissioner Dr Johnstone Makhubu assumes office with an ambitious reform and modernisation agenda.

In a statement marking his first day in office, Makhubu framed his appointment — made by President Cyril Ramaphosa on the recommendation of Finance Minister Enoch Godongwana — as a moment of national importance, underscoring the central role SARS plays in sustaining South Africa's fiscal stability.

His message struck a balance between tribute and transformation: recognising workers as the foundation of the economy, while outlining a strategic roadmap aimed at strengthening compliance, rebuilding trust and leveraging technology to future-proof the tax authority.

"Workers are the bedrock of our economy. Their effort sustains everything we do as a country," Makhubu said. "SARS exists to convert that effort into public value — funding education, healthcare, infrastructure and economic opportunity."

A Critical Institution at a Pivotal Time

Makhubu's appointment comes at a time when South Africa faces mounting fiscal pressures, with government debt levels hovering above 70% of GDP and revenue collection increasingly dependent on efficiency, compliance and economic growth.

SARS contributes over 90% of government revenue, collecting more than R1.7 trillion annually in recent fiscal cycles. However, the agency continues to grapple with challenges such as tax base erosion, illicit trade and compliance gaps in both the formal and informal sectors.

Against this backdrop, Makhubu emphasised that SARS occupies a central position in the country's "social and economic contract" — a role that requires not only technical competence but public legitimacy.

"We carry one of the most serious responsibilities in the state. That trust is not symbolic — it must be protected in every decision and every interaction," he said.

Leadership Philosophy: Stewardship Over Authority

In a notable departure from traditional bureaucratic language, Makhubu framed his leadership philosophy around stewardship, signalling a governance approach rooted in accountability and service.

"Leadership at SARS is not about power; it is about trust. That trust must be earned daily through fairness, consistency and humility in how we apply the law," he said.

This tone reflects broader efforts within public institutions to rebuild credibility following years of governance challenges, including the well-documented period of institutional decline at SARS during the mid-2010s.

Makhubu acknowledged the agency's recent recovery, crediting outgoing Commissioner Edward Kieswetter with restoring operational stability, improving compliance outcomes and rebuilding SARS's international reputation.

Under Kieswetter, SARS achieved sustained revenue growth, expanded audit capacity and re-established itself as a leading tax authority on the African continent.

"Doing Basics Right": A Back-to-Core Reform Strategy

At the heart of Makhubu's agenda is an internal reform programme dubbed "Doing Basics Right" — a back-to-core initiative aimed at strengthening operational efficiency and service delivery.

The programme focuses on simplifying processes, improving turnaround times and reducing administrative burdens for taxpayers. Its guiding principle — "the best service is no service" — reflects a shift toward frictionless systems where compliance becomes intuitive rather than enforced.

This approach aligns with global best practices in tax administration, where automation and streamlined processes reduce compliance costs while improving revenue outcomes.

Early internal targets are expected to include:

• Faster tax return processing and refund cycles

• Reduced audit backlogs

• Improved dispute resolution timelines

• Enhanced taxpayer communication systems

Modernisation 3.0: Scaling Digital Transformation

A cornerstone of the new Commissioner's strategy is the launch of "Modernisation 3.0", an advanced phase of SARS's digital transformation programme.

Building on earlier digital reforms, the initiative aims to deepen the use of:

• Data analytics and artificial intelligence

• Real-time compliance monitoring systems

• Automated risk detection and fraud prevention

• Integrated digital platforms for taxpayers and businesses

SARS has already made significant strides in digitisation, with over 95% of tax returns now filed electronically. Modernisation 3.0 seeks to push these gains further by creating a seamless, data-driven tax ecosystem.

"Technology is a force multiplier, but it is not a substitute for capability," Makhubu noted. "We must match modern systems with skilled professionals who can interpret data, enforce the law and engage with taxpayers effectively."

To this end, SARS is expected to increase investment in workforce development, including specialised training in data science, forensic auditing and digital compliance tools.

Crackdown on Illicit Economy Intensifies

Makhubu also placed strong emphasis on tackling South Africa's expanding illicit economy — a sector estimated to cost the fiscus tens of billions of rand annually through lost tax revenue.

Industries such as tobacco, alcohol, fuel and counterfeit goods have been particularly affected, with illicit trade distorting markets and undermining compliant businesses.

"SARS has developed its own Illicit Economy Strategy that will complement national efforts," he said. "The scale of the challenge is significant, and it demands coordinated and decisive action."

The strategy is expected to involve:

• Enhanced cross-border enforcement and customs intelligence

• Collaboration with law enforcement agencies and international partners

• Deployment of advanced tracking and monitoring technologies

• Targeted audits and investigations in high-risk sectors

Balancing Service and Enforcement

Makhubu's message drew a clear distinction between compliant taxpayers and those who deliberately evade obligations.

For compliant individuals and businesses, SARS aims to deliver a more transparent, predictable and user-friendly experience.

"Compliant taxpayers will be treated with clarity, respect and professionalism," he said.

However, he issued a firm warning to non-compliant actors:

"Those who choose not to comply, who abuse the system or undermine it for personal gain, should expect decisive enforcement action. A tax system only works when everyone contributes fairly."

This dual approach — combining improved service with stricter enforcement — reflects a global trend in revenue administration, where voluntary compliance is encouraged but backed by credible deterrence.

Workers' Day as a Strategic Anchor

By aligning his inaugural message with Workers' Day, Makhubu positioned SARS's mission within a broader socio-economic context.

"This day reminds us that institutions exist to serve people," he said. "Our task is to honour the work of South Africans by ensuring that the system they fund is fair, efficient and worthy of their trust."

The symbolic timing reinforces SARS's role not just as a revenue collector, but as a key enabler of national development — translating the labour of millions into public goods and services.

A New Phase for SARS

As SARS enters this new leadership phase, expectations are high that the agency will build on its recent recovery while adapting to a rapidly evolving economic and technological landscape.

With fiscal pressures mounting and compliance challenges intensifying, the success of Makhubu's agenda will be closely watched by policymakers, investors and taxpayers alike.

SARS has reiterated its commitment to strengthening service delivery, improving compliance systems and safeguarding South Africa's revenue base — signalling continuity in purpose, but innovation in execution.