Finance Minister Enoch Godongwana says nearly 50 percent of Treasury’s R91.83 billion departmental budget over the medium term will go to the South African Revenue Service (SARS), marking a significant investment in modernising the country’s tax collection systems.

Speaking during his 2025/26 budget vote speech, Godongwana announced that SARS will receive R45.76 billion,  or 49.8% of the Treasury’s budget, excluding direct charges, over the next three years.

This is an R8 billion increase from the previous year’s allocation.

The funding, he said, is aimed at “enhancing their ability to collect debt through better systems, increasing staff capacity and modernising their processes to establish e-invoicing for VAT, instant payment systems and upgrades of customs infrastructure.”

He emphasised that this investment must go hand in hand with transparency and accountability. “To monitor progress and improve transparency, last week we published monthly debt collection data from SARS for the first time,” said Godongwana.

Godongwana said the department’s total budget reflects a careful balance between technical and political demands, between macro and microeconomic realities, and between local constraints and global pressures.

“It is a balance between laws, policies and the ongoing journey. We are a nation moving towards a more equal society.”

The Treasury’s core focus remains the achievement of sustainable public finances. As part of this goal, the department plans to strengthen infrastructure investment, particularly at the municipal level, and rationalise government programmes through spending reviews.

“Since 2013, 276 spending reviews have been completed,” said Godongwana. 

He added that he will seek the Cabinet’s support to implement the outstanding recommendations.

Godongwana also announced new reviews to root out inefficiencies, including an audit of ghost workers in the public service and a review of executive remuneration in state entities.

A key initiative, he said, is the new Targeted and Responsible Savings (TARS) system designed “to unlock fiscal space by improving efficiency in public spending through a systematic evaluation process.”

Godongwana also reaffirmed Treasury’s strategy to stabilise debt through a growing primary surplus and reduced borrowing.

He also addressed confusion around inflation targeting policy, clarifying that it is the Finance Minister’s responsibility, not the Reserve Bank’s, to set the inflation target, albeit in consultation with the Bank.

“Such decisions should not be taken in haste, without the necessary technical and political engagements,” he said.

In response to the growing economic impact of climate change, he said Treasury is rolling out a National Disaster Risk Financing Strategy.

Meanwhile, reforms to the budget process, informed by a newly completed review, will be implemented from the 2026 Budget cycle, including strengthened Cabinet oversight of budget guidelines.

Godongwana also highlighted the upcoming Procurement Act as a key reform, asserting that it will entrench the constitutional principles of fairness, transparency, and cost-effectiveness while enabling policies that prioritise historically disadvantaged groups.

He noted that the draft regulations are expected to be finalised by August 2025 and promulgation during the 2025/26 financial year.

Furthermore, Godongwana pointed to the Conduct of Financial Institutions (COFI) Bill as a key milestone to improve consumer protection and financial inclusion. He said it will require financial institutions to develop transformation plans and empower the FSCA to enforce compliance with Black Economic Empowerment goals.

Godongwana also noted progress in anti-corruption measures, stating that “SARS investigations have recovered R4.8 billion in unpaid taxes,” while enforcement agencies and professional bodies have acted on findings from the State Capture Commission. A central register now tracks officials dismissed or who resigned during disciplinary actions, he said. 

He said these interventions are the first steps in implementing Treasury’s 2025–2030 Strategic Plan. They aim to secure sustainable public finances, ensure sound economic management, and unlock greater investment in infrastructure and public services.

hope.ntanzi@iol.co.za 

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