South African Revenue Service (SARS) commissioner Dr Johnstone Makhubu has welcomed the revised revenue estimate of R2.14-trillion announced by Finance Minister Enoch Godongwana in the Medium-Term Budget Policy Statement (MTBPS) on October 21.

The revised estimate indicates an increase of R17.1-billion compared with the R2.13-trillion Budget estimate in February.

This adjustment is despite downward revision of real GDP growth from 1.6% to 1.2% this year, SARS points out.

It says that, despite improved electricity reliability which supports economic activity, structural constraints such as logistics and infrastructure challenges continue to hinder South Africa’s growth prospects.

The revenue estimate, as announced, presents a challenge to the organisation, but SARS says it accepts this and remains committed to its mandate of collecting all revenues that are due, enhancing compliance and facilitating legitimate trade.

SARS notes that the revenue outlook excludes the R10-billion fuel-levy relief announced by the Minister in the MTBPS.

“The fiscal position demands disciplined execution across the organs of State and a capable, trusted revenue authority that fulfils its mandate firmly, without fear, favour or prejudice. SARS will continue to collect all revenue lawfully due, facilitate legitimate trade and protect the revenue base that funds government's development agenda,” Makhubu says.

As of September 30, SARS had collected R992.2-billion in net revenue, which includes gross collections of R1.23-trillion and refund payments totalling R239.1-billion.

Net revenue was R15.5-billion, or 1.6%, above the February Budget estimate, and R67.4-billion, or 7.3%, higher than the corresponding period last year.

This performance was supported by stronger corporate income tax (CIT), domestic value-added tax (VAT) and pay-as-you-earn (PAYE) collections, together with lower-than-estimated VAT refund payments, SARS explains.

“The year-to-date outcome demonstrates the resilience of South Africa’s revenue system. However, as reflected in the Minister’s speech, sustainable revenue growth ultimately depends on economic expansion, investment, job creation and broad-based compliance,” Makhubu avers.

SARS asserts that its compliance programme and associated efforts remain central to its revenue management philosophy and to protecting the integrity of the tax and customs system.

In the first six months of the financial year, compliance interventions secured a preliminary R137.7-billion, comprising R76.3-billion in direct cash collections and R61.3-billion in prevented revenue leakage.

“Every rand recovered through compliance interventions protects honest taxpayers and strengthens the fiscal framework. Compliance is one of the most effective tools available to safeguard the integrity of the tax and customs ecosystem,” Makhubu emphasises.

While the revenue performance for the first six months provides a solid foundation, achieving the revised revenue estimate will require sustained collection and compliance efforts during the remainder of the financial year, SARS cautions.

It notes that economic conditions, particularly domestic growth and developments in the global economy will remain important to the revenue outcome.

Revenue in the second half of the 2026/27 financial year is expected to increase by R66.3-billion (6.1%), driven mainly by CIT, domestic VAT and PAYE.

The MTBPS estimate for the second half of the 2026/27 financial year was revised upward to R1.15-trillion, which is R1.6-billion higher (0.1%), largely owing to an R11.7-billion increase in CIT, including interest.

This revision reflects an improvement in profitability of companies which is measured through the Gross Operating Surplus (GOS), which is projected to grow from 3.5% to 5.4%.

The GOS growth is premised on the results of the first two quarters, which is 10.7% and 7%, respectively.

Domestic VAT increased by R2.5-billion, in line with upward revision in household expenditure growth from 5.1% to 6.2%.

Also, the imports growth outlook improved from 6.5% to 11%, resulting in a further R2.2-billion increase in customs duties.

This upward revision reflects the resilience of revenue collections during the first half of the financial year despite a challenging economic environment, characterised by geopolitical tensions, supply chain disruption and increase in energy prices, SARS posits.