EDWARD KIESWETTER | Sars’ success lies in its stars as much as its numbers

Public institutions are not abstractions. They are living systems. They shape whether a country’s promises are believable, whether its future is affordable, whether citizens feel that participation is worth the effort and if their tax contribution delivers commensurate value.

I have spent much of my professional life thinking about institutions — what makes them strong, what causes them to fail and what it demands of the people inside them when they have been hollowed out. I have learnt that institutions do not usually collapse in dramatic moments. They erode gradually. Standards weaken. Purpose becomes procedural. Courage thins out. And eventually, trust gives way.

I speak today first and foremost as a public servant. One who understands that these roles are not entrusted to advance personal ambition but to steward something larger: the legitimate expectations of citizens. When I answered the call in 2019, it was not from overconfidence in my ability to fix a damaged institution but from a deep conviction that Sars belongs to the people it serves and that South Africa deserves a revenue authority worthy of its democracy. In fact, I entered knowing that the personal risk and cost would be inordinate.

What sustained me from the beginning was knowing that inside Sars were men and women who had been traumatised and marginalised by corrupt intent, yet still loved the institution deeply — some, to this day, still demonstrating that commitment in ways that remain incontestable. That gave me courage. It persuaded me that restoration, however difficult, was possible.

The task before us was therefore not merely administrative. It was moral. It was institutional. And it went to the heart of South Africa’s social compact between citizen and state that says: ‘Pay your taxes, and we will build a country worthy of your contribution’

In 2019, Sars was an institution in distress. State capture had not merely depleted its revenue‑generating capacity — it had attacked its soul. The architecture of integrity on which Sars had been built had been systematically dismantled. Public trust — the foundational currency of any tax authority — had been recklessly spent.

The task before us was therefore not merely administrative. It was moral. It was institutional. And it went to the heart of South Africa’s social compact between citizen and state that says: “Pay your taxes, and we will build a country worthy of your contribution.”

Restoring Sars demanded clarity of purpose, a strong bias for action and an uncompromising commitment to integrity. It also demanded people willing to hold the line when the easier path was silence or compliance, and people willing to uphold standards when doing so came at personal cost. Many here bore that cost.

What our people needed was a higher purpose worthy of sacrifice, a vision they could believe in, and a strategic intent they could make their own.

Tax administration is often misunderstood. It is seen as technical, transactional and remote from everyday life. It is seen as just another cost centre in government. That is a profound mistake.

In South Africa, approximately 90% of government expenditure is funded by tax revenue. Tax administration is therefore not a technical function. It is a generational act. Every rand collected in good faith, professionally and without fear or favour, reduces the burden carried not only by this generation but by generations not yet born.

When Sars functions properly, it performs a remarkable service precisely because it is invisible. It prevents crises that never materialise. It avoids taxes that never need to be raised. It protects households from decisions governments should never be forced to make.

When Sars does its work well, it protects the future.

Across my total time at Sars, spanning almost a decade and a half, I have seen the full arc of an institution — compromised and restored, diminished and redignified, doubted and ultimately trusted again. We drove voluntary compliance upward — because when citizens trust an institution, they participate in it.

Instead of sharing what Sars has achieved over the past seven years, I want to focus on what those achievements meant — for fiscal integrity, for economic stability and for the social compact itself.

Announcing a primary surplus is not a technical line item. It is the first time since the global financial crisis that South Africa has achieved this milestone. And it rests on a revenue foundation built by Sars — year by year, through compliance, service excellence and the quiet commitment of more than 14,000 public servants

The numbers tell a clear story. We crossed the R2-trillion revenue milestone. We recovered sharply from the Covid‑19 contraction that saw revenue fall to R1.25-trillion in 2020/21. This represents a post-Covid five-year compound annual growth rate of 9.95% (almost 10%) in an environment well below that level. We delivered compliance gains exceeding R300bn in successive years and cumulatively more than R1.6-trillion.

Those are the numbers. But the deeper significance embedded in these numbers is what they have done to South Africa’s fiscal trajectory. A fact not always appreciated.

For seven years — with the exception of the Covid period — Sars consistently delivered tax buoyancy above unity. Post-Covid, a revenue growth rate 1.5 times faster than economic growth, reflecting stronger compliance, broader participation and improved administration. The post‑Covid recovery, when buoyancy reached 2.17, represented a turning point that fundamentally altered the fiscal path.

The counterfactual question is worth asking plainly: what if Sars had merely delivered buoyancy of 1.0 — collecting revenue exactly in line with economic growth, and no more?

The answer is sobering. Over seven years, cumulative revenue would have been almost R850bn lower. The government would have borrowed that amount instead (or spent less or raised taxes). Debt‑to‑GDP would have peaked between 88% and 90% rather than 78.9%. Annual interest costs on that additional debt would have approached R80bn a year — perpetually. The 10‑year present value of those avoided interest payments is between R590bn and R620bn.

At debt levels approaching 90% of GDP, South Africa would have been entering territory where risk premiums rise sharply, ratings deteriorate further and borrowing costs begin to spiral. The fiscal stabilisation announced in recent budgets — debt consolidating and beginning to decline — was only possible because the revenue base existed to generate a primary surplus.

Announcing a primary surplus is not a technical line item. It is the first time since the global financial crisis that South Africa has achieved this milestone. And it rests on a revenue foundation built by Sars — year by year, through compliance, service excellence and the quiet commitment of more than 14,000 public servants.

The children of South Africa will never know the debt the country did not incur. They will never experience the austerity that never became necessary. That invisibility is the purest measure of what capable public institutions achieve.

In the 2025 budget, when the two percentage point VAT increase was proposed, it was to address a fiscal gap of about R75bn. That proposal was reversed — not only because of public opposition but because Sars demonstrated that improved compliance could meet the revenue need without placing an additional burden on consumers.

This mattered more than many appreciate. A VAT increase embeds itself permanently in the price level of an economy. For a household spending R15,000 a month on VAT‑able goods, it represents a direct annual cost of R3,600. For lower‑income households spending around R5,000 a month, the R1,200 annual cost is proportionally far more severe.

Improved compliance is not merely a technical achievement. It is a democratic one with generational impact. The burden is borne by those who should bear it — not shifted on to those least able to afford it

The second‑order effects would have been equally real. VAT pass‑through to inflation of between 0.8 and one percentage point would have raised the cost of living. Over five years, this would have amounted to roughly R7,500 in additional costs per household. Monetary tightening would likely have followed, raising mortgage costs, business borrowing costs, and suppressing already fragile demand.

By collecting more effectively from those who already owed, Sars protected households, pensioners and small businesses from a compounding burden.

Improved compliance is not merely a technical achievement. It is a democratic one with generational impact. The burden is borne by those who should bear it — not shifted on to those least able to afford it.

Institutions do not restore themselves. People restore them.

Throughout this journey, I was surrounded by public servants who chose integrity over expedience and excellence over adequacy. Tens of thousands of Sars employees who came to work every day not for applause but because they understood that their work mattered.

To those who endured the darkest years and chose to stay: your loyalty was not blind. It was principled. You held this organisation together when it could not hold itself.

To the leadership team who walked this road with me: what we built was never about individual legacy. It was a demonstration of what becomes possible when capable, courageous people align around a mission larger than themselves.

At my best, I was a catalyst. The energy was always yours.

My appreciation to you holds no bounds.

South Africa stands at another inflection point. Fiscal pressure, geopolitical uncertainty and technological disruption will test the state’s capacity in ways we cannot fully predict.

The ability of the state to collect revenue — fairly, efficiently and with the confidence of citizens — will determine whether South Africa can fund its own transformation and remain fiscally sovereign.

I leave Sars confident — not complacent — that it has the foundations, capability and institutional character to meet that moment.

But I make an earnest plea to all of you. Don’t ever become indifferent towards this institution that literally funds our democracy as well as the hopes and dreams of South Africans.

• This is an edited version of a speech by Kieswetter at his farewell dinner in Pretoria on Thursday. He leaves the revenue collector at the end of the month, after heading it for seven years