South Africa's tax revenue growth: insights from the 2025 Tax Statistics Bulletin

The National Treasury and the South African Revenue Service (SARS) have released the 18th annual edition of the Tax Statistics bulletin, marking a significant milestone in the country’s fiscal landscape. This newest edition offers an in-depth analysis of tax revenue collection and tax return information spanning the 2021 to 2024 tax years, presenting a comprehensive review of the period's financial performance as it relates to the fiscal years 2020/21 through 2024/25.

SARS continues to underpin the government's budgetary needs, illustrating its pivotal role as the nation's tax-collecting authority. With a lofty target of boosting sustainable tax revenue, SARS has successfully grown tax collections from a mere R113.8 billion in 1994/95 to an astounding R1 855.3 billion, projected for 2024/25. This impressive growth, calculated at a compounded annual growth rate of 9.8%, aligns with an average tax-to-GDP ratio of 22.3%.

In the current fiscal year, SARS collected R2.3 trillion in gross tax revenue, a remarkable increase of R147.8 billion or 6.9% compared to the previous year. Refunds accounted for R447.3 billion, also reflecting a rise of R33.4 billion or 8.1% year-on-year, resulting in a net tax revenue of R1.9 trillion—up by R114.4 billion or 6.6% from 2023/24.

The report reveals that Personal Income Tax (PIT) remains the cornerstone of tax revenue, contributing 39.5%, with annual growth driven by above-inflation increases from key economic sectors. The Financial Intermediation, Insurance, Real Estate, and Business Services sectors witnessed buoyant PAYE growth, while Company Income Tax (CIT) provisional collections also rose amid improved profitability in these sectors. Unfortunately, the mining industry grappled with challenges stemming from low commodity prices, resulting in an overall contraction.

Enhanced compliance measures have proven effective, with SARS's Compliance Programme interventions securing R304 billion in compliance revenue, up 16.7% from R260.5 billion in the prior fiscal year. This revenue boost stems largely from stringent cash-collection initiatives and robust strategies aimed at preventing revenue leakages.

Key highlights from the 2025 Tax Statistics bulletin include:

• PIT register growth: 27.1 million individuals, a 4.3% increase.
• Average tax rate dropped from 21.1% to 20.8% despite a total tax liability of R563.3 billion.
• 21.7% of companies assessed declared a positive taxable income.
• Approximately 900 285 registered VAT vendors, with 55.2% active.

Furthermore, the bulletin underscores the different demographics of assessed taxpayers. Gauteng emerges as the province with the highest concentration of taxpayers, as 38% of those assessed call it home, predominantly residing in the Johannesburg metro area, where they reported an average taxable income of R480 318. The analysis segmented taxpayers by age reveals a significant proportion, 26.7%, falling within the 35-44 age range, suggesting a fertile base for future revenue growth.

As for VAT, the figures indicate a more substantial contribution from the active vendors, with 82.5% classified as companies or close corporations. Import VAT and Customs Duties accounted for 18.2% of total tax revenue—an uptick from the previous year, propelled by increasing trade activities, especially in machinery and electronics.

However, commodity-based revenue sources faced adversity; MPRR payments decreased drastically by R5.3 billion (33.4%) due to a dip in prices for essential commodities. This had multifaceted impacts across various sectors but was somewhat mitigated by rising gold prices, highlighting the volatility inherent in the resource sector.

Overall, this year’s Tax Statistics bulletin not only charts the path of tax revenue growth but also lays the groundwork for future developments in South Africa's economic sustainability, underpinning the importance of compliance and taxpayer engagement in shaping a robust treasury for years to come.