Buoyed by SARS’ strong revenue collection, Finance Minister Enoch Godongwana, who tabled his 2025 Medium-Term Budget Policy Statement (MTBPS) before the National Assembly yesterday, vowed to intensify the clampdown on illicit trade, which has evaded R40b in taxes since 2020.

“Each year, billions of rands in taxes go uncollected, funds that could have closed our revenue gap and avoided tax increases entirely. Government is clamping down on this illegal trade. In the last six months, SARS suspended three licences for non-compliant tobacco production,” he said.

The Witness reports that the escalation of the fight against illicit trade forms part of broader government measures to grow the economy, reduce debt, and lower the cost of living.

Strong SARS performance lifts revenue

SARS, which has steadily improved its tax collection systems, exceeded previously set targets in the 2025 fiscal year.

Revenues, Godongwana said, will surpass the 2025 budget estimates by R19.3b.

This year, we will achieve a primary budget surplus of R68.5b (0.9% of GDP) which will grow to R224b by 2028/29. Government debt will stabilise in 2025/26 at 77.9% of GDP.

Debt-service costs are expected to grow at a slower rate of 3.8% per year, down from the 7.4% projected earlier this year.

Godongwana attributed the government’s fiscal turnaround to stronger revenue collection, disciplined spending and structural reforms.

The overcollection was largely due to stronger household spending, which boosted VAT receipts.

Corporate and dividend taxes also exceeded expectations.

Extra funds for infrastructure and key services

The additional revenue will fund infrastructure investment, allocated R15.8b, and frontline departments, such as health and education.

In KZN, the provincial health department will receive an extra R1.39b, the education department R640.876m, while over R630m will go to the provincial disaster recovery fund.

“This higher revenue also allows us to bring forward some once-off expenditure.”

To address the high cost of living, he unveiled a new inflation target of 3%, replacing the long-standing 3–6% range, which the South African Reserve Bank has argued is no longer effective.

GDP growth is projected at 1.2% this year and 1.8% between next year and 2028, with future growth expected to be stronger due to structural reforms.

To rein in tender corruption and maladministration, Godongwana announced the launch of the National Treasury’s first Procurement Payments Dashboard, allowing the public to view government supplier payments in real time.

This represents a massive step forward in procurement transparency.

Rand strengthens after budget speech

The rand, which was trading at R17.14 to the dollar early yesterday, strengthened to R17.07 shortly after Godongwana’s speech.

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