Finance Minister Enoch Godongwana stated that the South African Revenue Service (SARS) is intensifying efforts to broaden the country's tax base. This includes bringing more businesses from the informal economy and the taxi industry into the tax system, as well as boosting the fight against illicit financial flows.
Godongwana made this statement in a written response to parliament when questioned about the government's strategic measures aimed at expanding the tax base rather than increasing rates for already compliant individuals and companies.
He stated that 'SARS continues to expand the tax base by improving registration, filing, and payment where tax compliance remains low. This applies to the informal economy and the taxi industry. Furthermore, SARS is working to identify and respond to illicit financial flows and other forms of non-compliance.'
Informal Economy in SARS's Focus
The Minister noted that the informal economy has been identified as an area where SARS can integrate more taxpayers. According to Godongwana, since the start of the 2024/25 financial year, SARS has helped register 21,890 previously unregistered taxpayers in the informal sector, generating revenue of R314 million.
To identify businesses not registered for tax, SARS utilizes digital platforms, taxpayer education, and simplified registration procedures. The taxi industry, including e-hailing services, is recognized as a priority sector in SARS's work on the informal economy and compliance. Risk assessments, available data, targeted interventions, and taxpayer education are used in this sector to improve registration, reporting, and payments.
Moreover, SARS is strengthening the fight against illicit financial flows, including tax evasion, customs fraud, money laundering, corruption, and organized crime.
Billions Recovered Through Enforcement
During the 2024/25 financial year, SARS conducted 10,142 customs seizures valued at R6.3 billion, and recovered R6.1 billion related to VAT fraud and illegal gold trade.
The Minister emphasized that these results demonstrate SARS's active, coordinated work in curbing illicit financial flows, which is linked to direct revenue collection, preventing leakage, and disrupting criminal value chains.
SARS collaborates with Statistics South Africa and other partners to develop a unified taxonomy and a robust measurement approach that allows differentiation between the formal, informal, and illicit economies. Currently, SARS is transforming intelligence data into measurable compliance and enforcement outcomes.