The National Budget Speech delivered by Finance Minister Enoch Godongwana underscored the critical role of tax compliance in bolstering South Africa's fiscal health. He announced that the South African Revenue Service (SARS) has been allocated R3.5 billion for the current financial year, with an additional R4 billion earmarked over the medium term, to enhance its technological capabilities and combat tax evasion. ​

Minister Godongwana emphasized the significance of adhering to tax obligations: "I call on all South Africans to comply with the law and support SARS in its endeavour to collect the revenues that enable the government to fund and provide critical services." He expressed gratitude to compliant taxpayers and urged those not yet compliant to fulfill their responsibilities, highlighting that investments in SARS will yield long-term improvements.​

Current Tax Compliance Overview

Recent statistics reveal that SARS has made notable strides in enhancing tax collection. Over the past five years, SARS has modernised its systems by shifting to online services and automating many of its processes to improve service, detect fraud, and enhance compliance.

In the 2024/25 filing season, SARS introduced auto-assessments for non-provisional taxpayers, resulting in 4,765,753 individuals being assessed automatically—a 24.94% increase from the previous year. This innovation has streamlined the tax filing process, making it more efficient for taxpayers and the revenue service alike.​

To further address the fiscal deficit, the revised budget proposes a phased increase in the value-added tax (VAT) rate. Initially set for a 2-percentage-point hike, the proposal has been adjusted to a 0.5 percentage point increase from the current 15% on May 1, followed by another 0.5 percentage point rise in 2026. This marks the first VAT increase since 2018.

In light of these developments, the upcoming CRS & FATCA Compliance, Automation, and Industry Readiness Conference in Cape Town on March 26 gains heightened significance. This event offers a platform for companies, regulators, and financial managers to discuss and navigate the complexities of tax compliance in South Africa.

"As South Africa grapples with fiscal challenges and evolving tax regulations, staying informed and prepared is crucial,” says Daniel Farías, Head of Sales & Marketing at Trans World Compliance. “The conference will provide invaluable insights into compliance automation and readiness, essential for aligning with global standards and ensuring efficient tax practices."​

Attending this conference is pivotal for stakeholders aiming to align with global standards and ensure efficient tax practices. It offers practical training on the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA), both integral to international tax compliance.

Looking Ahead

Farías says that as Minister Godongwana’s budget takes hold of the nation, stakeholders across sectors have keenly observed the proposed fiscal measures and their implications. “Ensuring robust tax compliance remains a cornerstone of South Africa's economic strategy, vital for sustainable growth and development,” he adds.

As South Africa navigates its fiscal challenges, robust tax compliance remains a cornerstone of the nation's economic strategy, vital for sustainable growth and development. Join South Africa’s top financial professionals, compliance leaders, and regulators in a must-attend event that will shape the future of CRS and FATCA compliance.

For more information and registration details, click HERE.