While the South African Revenue Service has reformed over the past seven years, it will require more high-level skills to build on its current momentum towards improved tax administration and revenue collections — particularly among the wealthy.
Sars commissioner Edward Kieswetter told Business Times that the high-wealth individual unit and other Sars divisions urgently need additional technical skills to improve collections and co-operation with other institutions to enhance compliance.
“We could do with more forensic investigators, not just in [the high-net-worth unit], but across the board. We can do with more wealth management specialists who understand how family offices work and how offshore structuring works.
“We can do with more transfer-pricing specialists, highly specialised financial auditors. We can do with more data scientists. We can do with a lot more people who bring technological capability. So I don’t want to single out one department as an area where we need more resources. I could do with 500 or 1,000 more excise officers.”
Kieswetter’s remarks came as finance minister Enoch Godongwana tabled the 2026 budget, during which the commissioner received a standing ovation from a joint sitting of parliament.
They also come as Kieswetter prepares to vacate the position next month, having joined Sars to restore stability after years of state capture. In tabling the 2026 budget, Godongwana announced a raft of tax relief measures, including no new taxes and inflation-linked increases in most categories.
Wealthy people organise themselves differently [from ordinary people]; they have multiple sources of income and investment. And so they need a different kind of service. It’s not elitism; it is a client-centric approach
— Edward Kieswetter, Sars commissioner
“We are raising the capital gains tax exemption for the sale of a small business by older persons from R1.8m to R2.7m. This applies to small businesses worth up to R15m instead of the R10m previously. It will enable small business owners to receive more tax relief when they sell their businesses,” the minister said.
Kieswetter said the primary purpose of the high-wealth individual unit is to provide a better service for people who have a different structure of income and wealth than ordinary people. The role of the unit, established in 2021, will be clearer once Sars has tallied its collections in March.
“Wealthy people organise themselves differently [from ordinary people]; they have multiple sources of income and investment. And so they need a different kind of service. It’s not elitism; it is a client-centric approach.”
He said there were 250 employees in Sars’ syndicated tax and customs unit, but the division could do with as many as 1,000 people because “crime is proliferating and we are barely touching the surface”.
Speaking at a Momentum post-budget breakfast on Friday, National Treasury director-general Duncan Pieterse said Sars’ work in outperforming collection estimates for the year should be applauded.
“I think Sars has made significant gains over the past few years in strengthening revenue administration, efficiency and collection. There is more that they can do, by their own acknowledgement, in particular around the illicit economy. So their focus is turning towards [that] at the moment.”
According to the Budget Review, the government is examining tax avoidance arrangements, particularly those involving high-net-worth individuals planning to cease being South African tax residents.
“The arrangement involves deliberately staggering the cessation of tax residence between spouses, where significant assets are transferred to a spouse who has already become non-resident before the remaining spouse ceases residence.
“In these circumstances, the donations tax exemption applies, while the subsequent cessation of tax residence by the remaining spouse results in a reduced income tax liability.”
The review says these arrangements are designed to avoid both donations tax and income tax on cessation of residency, undermining the original intent of these provisions. It proposes that the donations tax exemption for spouses be limited to donations made to a spouse who is a resident.
Kieswetter told a joint sitting of Parliament on Friday that Sars is structurally underfunded and that — as long as this persists — government will struggle to close the estimated R500bn tax gap. He said Sars is adequately funded for the debt-collection project in the current year.
With limited economic growth and a stretched tax base, VAT’s stability draws administrative attention over politically costly rate adjustments. This year, the emphasis shifts away from dramatic policy moves toward targeted, enforcement‑led refinements
— Micaela Paschini, lead for tax legal at Tax Consulting SA
The 2026 Budget Review notes that last year’s budget and medium-term budget policy statement (MTBPS) provisionally included R20bn in tax increases for 2026, to be reconsidered if Sars could collect an additional R20bn in tax debt.
“Sars is unlikely to meet its target. However, given improving 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 is revised down by R57.2bn relative to the 2025 MTBPS, primarily due to the withdrawal of the proposed tax increases. Improvements in several tax bases partly offset the withdrawn R20bn in tax increases. VAT refund projections are revised down, but lower import VAT weakens the medium-term outlook for net VAT collections.”
Kieswetter took issue with what he called a fixation on tax debt collections, saying that calling this a failure on Sars’ part reflects a “gross misunderstanding” of its role. He said Sars is a tax administrator, not an enforcer of a “set of transactions”.
The National Treasury’s estimates of national expenditure show spending is expected to increase from R15.8bn in 2025/26 to R16.8bn in 2028/29. Spending on compensation of employees is projected to account for 67.3%, or R32.6bn, of total expenditure over the medium term.
Michael Kransdorff, CEO of INTLTAX, said South African couples can now transfer up to R4m offshore yearly without Reserve Bank approval or a Sars tax clearance certificate, after the single discretionary allowance was doubled from R1m to R2m.
Micaela Paschini, lead for tax legal at Tax Consulting SA, said Budget 2026 is shaped by the need to drive revenue — with VAT remaining a dependable lever.
“With limited economic growth and a stretched tax base, VAT’s stability draws administrative attention over politically costly rate adjustments. This year, the emphasis shifts away from dramatic policy moves toward targeted, enforcement‑led refinements,” she said.
Miyelani Mkhabela, CEO and chief economist at Antswisa Capital Partners, said Kieswetter had restored the institution’s reputation, upheld taxpayer rights and modernised tax and customs systems to streamline operations.
“Sars has seen significant growth in tax revenue collection between the 2015/16 and 2024/25 fiscal years, with preliminary data extending into early 2026. Total revenue has increased from approximately R1.07-trillion in 2015/16 to more than R1.85-trillion in 2024/25,” he said.
Mkhabela said the next commissioner must continue with Sars’ modernisation into its next strategic phase, focusing on transforming tax administration through advanced data science, artificial intelligence and real-time automated compliance.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.