Background and targets 

The 2025 Budget and 2025 Medium-Term Budget estimated that SARS would collect between R20 billion and R50 billion in additional tax revenue by increasing total tax debt collections from R95 billion to at least R120 billion in 2025/26. This projected increase formed part of the revenue assumptions for the fiscal year.

To support this objective, SARS was allocated an additional R7 billion over the medium-term expenditure framework period and recruited approximately 1,500 additional debt collectors. The additional funding was aimed at strengthening enforcement capacity and improving recovery processes. 

Recorded collection outcomes 

The Budget confirms that the projected increase in collections was not achieved in full. As at 31 January 2026, total outstanding tax debt amounted to approximately R646 billion. Of this amount, approximately R518,2 billion represents undisputed debt.

By 31 January 2026, SARS collected R79,4 billion. This is approximately R15 billion below the prior R95 billion collection target and materially below the enhanced R120 billion target for 2025/26.

The shortfall is attributed to delays in onboarding additional personnel, an increase in disputed debt and growth in deferred payment arrangements. As a result, additional revenue from debt collections is not taken into account in the fiscal framework.

Takeaways 

The scale of outstanding tax debt remains significant, particularly in respect of undisputed amounts. Undisputed liabilities present fewer procedural barriers to recovery than amounts under objection or appeal.

An increase in disputed debt is also recorded. It should be noted that, due to the “pay now, argue later” rule embodied in section 164 of the TAA, the lodging of an objection or appeal does not, in itself, suspend the legal obligation to pay tax. Suspension requires a separate application in terms of that provision. Taxpayers engaged in disputes should therefore critically consider the statutory requirements to qualify for such suspension should they wish to request the delay of the payment of the disputed tax debt.

Growth in deferred payment arrangements is similarly noted. Such arrangements regulate the timing of payment of the tax debt but do not extinguish the underlying tax liability. Relief under section 167 of the TAA is conditional, and ongoing compliance with agreed terms is central to maintaining that relief.

Conclusion

The Budget points to strengthened debt collection capacity within SARS, although collections fell short of projected targets. This is (like with every business) a never-ending struggle.

Taxpayers should assess outstanding liabilities carefully, distinguish between disputed and undisputed amounts and ensure that procedural safeguards available under the TAA are properly utilised where appropriate.