South African Taxpayers Face More Pressure
South African taxpayers are heading for tougher times as the South African Revenue Service (SARS) struggles to meet its ambitious revenue targets.
SARS Falling Short
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SARS aimed to collect an additional R35 billion this year but is falling behind.
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While it is on track to meet its baseline target, it is R10 billion short of the higher revenue goal needed to ease fiscal pressure.
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Finance Minister Enoch Godongwana has warned that spending cuts or new taxes will be inevitable if revenue falls short.
More Taxes Coming
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Taxpayers are already on the hook for R20 billion in extra taxes in 2026.
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Government’s failed attempts to raise VAT this year have left a gaping hole in collections. Instead, it increased the fuel levy and froze inflation adjustments on tax brackets and medical aid credits.
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SARS believes there is over R300 billion in uncollected taxes, but if it can’t recover this, the burden shifts to compliant taxpayers.
Over-Taxed and Under-Served
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South Africa’s tax base is small: only 7.9 million people carry most of the load.
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Analysts warn the country is well beyond the Laffer Curve, meaning higher taxes now reduce revenue by discouraging work, investment, and compliance.
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Despite heavy taxes, South Africans get little in return: many households pay privately for healthcare, security, education, and energy.
Government Spending Problem
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South Africa’s fiscal multiplier is below 1, showing government spending destroys more value than it creates.
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Billions are wasted through corruption, inefficiency, and failed projects, while government pushes for costly programmes like National Health Insurance and a basic income grant.
The Bigger Picture
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With stagnant growth of just 0.7% over the past decade, South Africa’s economy cannot sustain more tax pressure.
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Unless SARS improves collections and government reins in spending, taxpayers will continue to bear the brunt.
Finance Minister Godongwana will outline the next steps in the medium-term budget policy statement in November.
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