Edward Kieswetter on why SARS has a R22 billion shortfall

John Maytham speaks to South African Revenue Services (SARS) Commissioner Edward Kieswetter about their tax collection shortfall and the knock-on effect on debt servicing costs, following a tight Medium Term Budget Policy Statement.  

Listen below.

SARS is likely to miss its February 2025 revenue target by a whopping R22 billion rand, Finance Minister Enoch Godongwana announced during his medium-term budget policy statement (MTBPS).

The shortfall marks a notable deviation from projected tax collection targets.

Kieswetter says it reflects several economic, structural and compliance-related challenges, but it's not all bad news.

"It's a good news, bad news story."

- Edward Kieswetter, Commissioner - SARS

On Wednesday Finance minister Enoch Godongwana said one of the reasons for the shortfall was fuel levy contractions.

"Eskom last year had to burn these expensive open cycle gas turbines to supplement the poor performance of the coal-fired power stations... "

- Edward Kieswetter, Commissioner - SARS

Kieswetter says other factors are falling fuel demand and the growth of rooftop solar.

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What happens in the tax take is a direct reflection of what's happening in the economy, says Keiswetter.

Subsequently, income tax collections are likely to be lower than predicted.

" At the time of the budget, the assumption was that the wage bill would grow by 8.4% when it's actually closer to 5%. That has meant a R12 billion lower collection... purely a reflection of a wage bill not growing as fast as we had assumed."

- Edward Kieswetter, Commissioner - SARS

VAT collections from imports also impacted collections, contracting 4.5% relative to the same period in the last tax year.

"In that regard, we had a shortfall of almost R16 billion."

- Edward Kieswetter, Commissioner - SARS

Scroll up to the audio player to listen to the interview.