The appointment of Ngobani Johnstone Makhubu as South African Revenue Service commissioner is a welcome one. He takes office at a moment when Sars has just crossed the historic R2-trillion revenue mark for 2025/26, proof that when the revenue authority is properly led and properly supported, it can deliver for the country.
Makhubu’s task is not to reinvent Sars. It is to sharpen it. Three priorities should dominate his tenure:
- crushing illicit trade;
- collecting long-outstanding debt; and
- keeping Sars ahead of the curve through modernisation.
If he gets those three right, Sars will not merely meet targets; it will become one of the few institutions in government capable of restoring confidence in the state. If he gets them wrong, the illicit economy will keep growing, honest taxpayers will keep carrying the load, and South Africa will keep paying the price.
Sars has warned that the illicit economy has expanded rapidly, outpacing legitimate economic growth for more than a decade and peaking at around 15% of GDP.
Illicit trade should be the first and most aggressive fight. Sars has warned that the illicit economy has expanded rapidly, outpacing legitimate economic growth for more than a decade and peaking at around 15% of GDP.
In its 2026/27 performance plan, the agency notes that funding constraints are limiting its ability to combat the syndicates behind tobacco, alcohol, fuel, gold and crypto-related activity, and that further cuts will slow modernisation, weaken frontline capacity and reduce its ability to target the sectors where the losses are greatest.
The scale of the tobacco and alcohol problem alone should alarm anyone serious about protecting the national purse. Illicit tobacco has grown from roughly a quarter of the market in 2014 to as much as 75% by 2025, costing the fiscus up to R15bn a year. Illicit alcohol is costing about R11bn annually, while illegal fuel blending, gold smuggling and counterfeit goods continue to erode jobs, revenue and public health. In total, the illicit economy costs the fiscus over R100bn a year.
This is not petty noncompliance. It is organised economic sabotage. Sars must therefore be funded as a strategic enforcement institution, not treated as another line item to be trimmed when the National Treasury is under pressure.
Responding to ActionSA’s written enquiry regarding the fight against illicit trade, outgoing Sars commissioner Edward Kieswetter confirmed that the agency had asked for an additional R7.7bn over the medium term (next three years), including addressing sustained underfunding, scarce-skill retention and a revenue-enhancement programme.
The commissioner also set out the specific tools needed to win this fight:
- a dedicated illicit economy unit;
- smart border enforcement;
- traceability systems, integrated audits;
- predictive e-commerce risk tools; and
- deeper international co-operation.
That is the blueprint. What matters now is whether the government funds it.
ActionSA was the first to place proper Sars funding on the national agenda, and we were right to do so. In the 2025 budget, the finance minister allocated an additional R7.5bn to Sars over the medium term after sustained pressure to correct years of underfunding at the agency.
The impact was immediate: Sars collected R2.010-trillion in 2025/26, more than R155bn above the previous year and R25bn above budget. That is the clearest possible answer to anyone still doubting the return on investment in Sars. Fund the institution properly, and it pays the country back many times over.
Sars has already shown what is possible when it is properly funded. The real risk now is not institutional failure but political backsliding — a return to underfunding enforcement while asking compliant taxpayers to carry an ever-heavier burden
But the job is far from done. Sars’s own 2026 budget shows total outstanding tax debt of R646bn as at January 31, of which R518bn was undisputed. Meanwhile, Sars had collected R79.4bn against a R95bn target — a shortfall of about R15bn. That is a vast sum that can and should be recovered.
Debt collection must therefore be the second priority of the new commissioner: relentless, data-driven and unapologetic. South Africa cannot afford a tax authority that is good at assessments but slow at converting debt into cash.
The third priority is modernisation, and here too the lesson is clear: Sars must stay ahead of the curve. The agency has warned that it lacks sufficient manpower and technical capability if material funding gaps are not addressed, and that it struggles to attract and retain scarce skills in audit, digital forensics, ICT, data science and legal work. Modern enforcement now depends on exactly those capabilities.
Makhubu therefore inherits both an opportunity and a warning. The opportunity is to lead an institution that can continue to make a measurable difference to South Africa’s fiscal health. The warning is that the illicit economy will not wait, the debt book will not shrink by itself, and technology will not modernise a revenue authority that is under-resourced and overburdened.
Sars has already shown what is possible when it is properly funded. The real risk now is not institutional failure but political backsliding — a return to underfunding enforcement while asking compliant taxpayers to carry an ever-heavier burden.
Makhubu should be clear from the outset: the fastest way to grow revenue is not to squeeze compliant taxpayers, but to close the gaps exploited by those who pay nothing at all. Fix that, and the numbers will follow.
• Beesley is an ActionSA MP and a member of parliament’s finance committee.
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.