Sars Deputy Commissioner Johnstone Makhubu told lawmakers that the tax authority is intensifying efforts to collect outstanding debt while acknowledging that the process remains complex and long-term.
Image: Timothy Bernard | Independent Newspapers
The South African Revenue Service (Sars) has said that it remains on track to recover billions of rand in outstanding tax debt, despite challenges in collecting arrears from struggling taxpayers and defunct companies.
Speaking during parliamentary hearings on the 2026 National Budget on Friday, Sars Deputy Commissioner Johnstone Makhubu told lawmakers that the tax authority is intensifying efforts to collect outstanding debt while acknowledging that the process remains complex and long-term.
Makhubu said Sars had been tasked with collecting about R135 billion in outstanding tax debt, supported by additional funding allocated to strengthen its compliance and enforcement capabilities.
“We are still pretty much en route to collecting the debt that we aimed to collect,” he said.
The revenue authority received additional resources as part of a broader government effort to improve revenue collection and tackle tax non-compliance. Approximately R2bn of the funding allocated to Sars is aimed specifically at strengthening debt collection capacity.
However, Makhubu acknowledged that the tax authority continues to face headwinds in recovering outstanding taxes.
“We have been on record in the past indicating that the collection of the debt has continued to be challenging,” he said.
Despite these difficulties, Sars expects stronger collections toward the end of the financial year, which traditionally sees a surge in payments as companies and individuals settle outstanding tax obligations.
“The month of March tends to be the highest collection month of the year,” Mukuju explained, noting that a final report on the debt recovery programme will be presented to Parliament once the financial year closes.
Sars has already begun expanding its operational capacity to improve compliance enforcement. According to Makhubu, the tax authority has recruited around 690 additional staff members, whose work has already generated about R12bn in collections.
The expanded team forms part of a broader strategy to strengthen Sars’ ability to pursue unpaid taxes and improve compliance across the tax system.
However, the scale of the challenge remains significant. Sars revealed that its total tax debt book stands at approximately R650bn as of the end of February. Of this amount, about R374bn is undisputed, meaning taxpayers acknowledge the liability but have yet to settle their debts.
A further R278bn is disputed, reflecting cases where taxpayers are contesting their obligations through administrative or legal processes. Even within the undisputed category, Makhubu said collecting the debt is not always straightforward.
“Some of the entities that owe us money are financially distressed and are asking to enter into deferred payment arrangements,” he said.
In such cases, Sars assesses the financial position of taxpayers and may allow them to repay their liabilities through structured payment plans, provided they demonstrate the ability to meet the agreed terms. At the same time, the revenue authority is reviewing portions of its debt book that may ultimately prove uncollectable.
According to Makhubu, a growing share of outstanding debt relates to individuals who have died or companies that are no longer operating. These cases may eventually need to be impaired or written off.
“As we work through our debt book, we are increasingly realising that some portions will need to be impaired or written off,” he said.
This process, he explained, is standard practice in financial management and will allow SARS to focus its efforts on recoverable debt.
Meanwhile, Sars Commissioner Edward Kieswetter said they conducts regular debt book analyses and will share this information with Parliament and stakeholders, emphasising that its compliance programme focuses on ensuring all due taxes are collected, not just recovering debt
“The ultimate goal and aspiration is to ensure that that tax buoyancy is at least at or above one, which is the ultimate indicator of the efficient extraction of taxes,” Kieswetter said.
Beyond debt collection, Sars is also strengthening its broader compliance strategy, including tackling the country’s illicit economy.
The tax authority is working closely with other government departments under the National Illicit Economy Disruption Programme. The initiative aims to improve coordination between agencies responsible for combating illegal trade, tax evasion and organised crime.
Kieswetter said Sars is implementing a five-point plan and engaging the Presidency to lead the initiative due to its multi-agency nature.
“On Wednesday this week we had a very productive meeting with all the frontline agencies, as well as agencies that are connected to it, as well as the business sector,” he said.
“I am persuaded that if we commit to the overall spirit and agreement, we should be able to see us making more progress in the illicit and criminal economy.”
Kieswetter called for a government-wide review of capital allocation, suggesting funds should be directed to clear, measurable projects—such as improving operations at the Lebombo Border Post between South Africa and Mozambique—to ensure tangible returns on public investment.
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