While the South African Revenue Service has improved over the past seven years, it will need more high-level skills to maintain its current momentum towards better tax administration and revenue collection – particularly among the wealthy.
SARS Commissioner Edward Kieswetter The high-wealth individual unit and other SARS divisions are in urgent need of additional technical skills to improve collections and collaborate with other institutions to enhance compliance, he told the Business Times.
“We could do with more forensic investigators, not just in the (high-net-worth entity), but across the board. We could do with more wealth management experts who understand how family offices work and how offshore structures work.
“We could do with more transfer-pricing experts, highly specialized financial auditors. We could do with more data scientists. We could do with a lot more people who bring technical capability. So I don't want to single out a department as an area where we need more resources. I could do with 500 or 1,000 more excise officers.”
Kieswetter's comments came as Finance Minister Enoch Godongwana presented the 2026 budget, during which the commissioner received a standing ovation in a joint sitting of Parliament.
They also come as Kieswetter prepares to vacate his post next month, having joined SARS to restore stability after years of state capture. Presenting the 2026 budget, Godongwana announced tax relief measures, including no new taxes and inflation-linked increases in most categories.
Rich people organize themselves differently (from ordinary people); He has many sources of income and investment. And so they need a different kind of service. This is not elitism; It's a customer-centric approach
— Edward Kieswetter, SARS Commissioner
The minister said, “We are increasing the capital gains tax exemption for small business sales by older persons from R1.8m to R2.7m. This applies to small businesses up to R15m instead of R10m previously. This will enable small business owners to get greater tax relief when they sell their business.”
Kieswetter said that its primary objective high net worth person The objective of the entity is to provide better service to people whose income and asset structure is different from that of the general population. The role of the unit set up in 2021 will become clear after SARS tallies its collections in March.
“Wealthy people organize themselves differently (from ordinary people); they have multiple sources of income and investments. And so they require a different kind of service. This is not elitism; this is a customer-centric approach.”
He said SARS' Syndicated Tax and Customs Unit had 250 staff, but the division could operate with more than 1,000 people because “crime is increasing and we are barely touching the surface”.
Speaking at the Momentum post-Budget breakfast on Friday, the National Treasury Director General duncan peters Said that the work of SARS in outperforming the collection estimates for the year should be appreciated.
“I think SARS has made significant gains over the years in strengthening revenue administration, efficiency and collection. Especially around the illicit economy, there is a lot more they can do with their approval. So their focus is on (that) at the moment.”
according to budget reviewThe Government is investigating tax avoidance arrangements, particularly those involving high net worth individuals who plan to cease to be South African tax residents.
“This arrangement involves the deliberate deferment of the cessation of tax residence between spouses, where significant assets are transferred to the spouse who has become non-resident before the remaining spouse ceases to reside.
“In these circumstances, the donation tax exemption applies, while the income tax liability is reduced as a result of the cessation of tax residence by the remaining spouse.”
The Review notes that these arrangements are designed to avoid both donation tax and income tax on cessation of residence, which undermines the original intent of these provisions. It is proposed that spousal donation tax exemption will be limited to donations made to the resident spouse.
Kieswetter told a joint sitting of parliament on Friday that SARS is structurally underfunded and – as long as this continues – the government will struggle to close the estimated R500bn tax gap. He said SARS has been adequately funded for the debt-recovery project in the current year.
With limited economic growth and an expanding tax base, the sustainability of the VAT draws administrative attention to politically costly rate adjustments. This year, the emphasis has shifted from dramatic policy to targeted, enforcement-based refinements
— Micaela Paschini, Head of Tax Legal Affairs at Tax Consulting SA
The 2026 Budget Review said the R20bn tentatively included in the tax increase for 2026 in last year's Budget and Medium-Term Budget Policy Statement (MTBPS) would be reconsidered if SARS could collect an additional R20bn in tax debt.
“SARS is unlikely to meet its target. However, given the improvement in fiscal metrics and the potential negative impact on the economy from additional tax increases, the government has decided to withdraw this proposal.
“The medium-term tax revenue outlook has been revised down by R57.2bn relative to 2025 MTBPS, mainly due to the withdrawal of the proposed tax increase. The improvement in several tax bases partly offsets the R20bn taken out in tax increases. VAT refund projections have been revised down, but lower import VAT weakens the medium-term outlook for net VAT collections.”
Kieswetter took issue with the fixation on tax debt collection, saying that calling it a failure on the part of SARS reflected a “gross misunderstanding” of its role. He said SARS is a tax administrator, not an enforcer of “a set of transactions”.
National Treasury's national expenditure projections show that spending is expected to rise from R15.8 billion in 2025/26 to R16.8 billion in 2028/29. Expenditure on employee compensation is estimated to be 67.3% of total expenditure or R32.6 billion in the medium term.
INTLTAX CEO Michael Kransdorf said that after the single discretionary allowance was doubled from R1m to R2m, South African couples can now transfer up to R4m annually offshore without Reserve Bank approval or a Sars tax clearance certificate.
Micaela Paschini, head of tax legal at Tax Consulting SA, said Budget 2026 has been shaped by the need to raise revenues – with VAT remaining a reliable lever.
“With limited economic growth and an expanding tax base, the sustainability of the VAT draws administrative attention to politically costly rate adjustments. This year, the emphasis has shifted away from dramatic policy toward targeted, enforcement-based refinements,” she said.
mialani makhabelaThe CEO and chief economist of Antswisa Capital Partners said Kieswetter has restored the institution's reputation, upheld taxpayers' rights and modernized the tax and customs systems to streamline operations.
“SARS has seen significant growth in tax revenue collections between the 2015/16 and 2024/25 financial years, with preliminary data extending to early 2026. Total revenues have increased from approximately R1.07-trillion in 2015/16 to more than R1.85-trillion in 2024/25,” he said.
Makhabela said the next Commissioner should continue the modernization of SARS in its next strategic phase, focusing on transforming tax administration through advanced data science, artificial intelligence and real-time automated compliance.