SARS has proudly announced that it collected more than R2-trillion in tax revenue for the 2025/26 fiscal year. At first glance, this sounds like a triumph, a sign of efficiency and fiscal strength.
But beneath the headline lies a troubling reality: this is not a celebration of prosperity, but a symptom of a shrinking economy and an overburdened tax base.
Revenue collection should be celebrated when it reflects a growing number of taxpayers — more people employed, more small businesses surviving, and more enterprises contributing to the economy.
Instead, SA’s tax base continues to shrink. Fewer taxpayers are carrying a heavier load, squeezed by rising personal income tax, VAT, and corporate tax obligations. This is not sustainable. It is akin to celebrating while taxpayers are being taxed to death.
The strain is compounded by relentless increases in the cost of living. Eskom’s tariff hikes, escalating fuel prices, and the knock-on effects on food and household consumables mean that ordinary South Africans are paying more for less.
Every rand collected by SARS comes from households already stretched to a breaking point. To herald this as a victory is to ignore the lived reality of citizens who are struggling to survive.
In the Eastern Cape, where unemployment remains stubbornly high and small businesses battle to stay afloat, the impact is particularly severe. Families across the province are forced to make impossible choices between essentials, while entrepreneurs face rising input costs that erode their margins and threaten their survival.
True fiscal success lies in broadening the tax base through economic growth. That means creating jobs, supporting small businesses, and fostering an environment where more South Africans can participate in the economy.
Without this, record collections are hollow. They reflect not prosperity, but desperation, a government extracting more from fewer contributors.
SA cannot tax its way to growth. The celebration of record revenue is misplaced unless it is accompanied by evidence of a healthier, expanding economy. Otherwise, it is tantamount to celebrating the slow suffocation of taxpayers.
What SARS should be proud of is not how much it collects, but how many new taxpayers are contributing because they have jobs, businesses, and opportunities.
Fiscal sustainability requires reform: policies that stimulate employment, reduce barriers for small businesses, and encourage investment. Only then will revenue growth be a sign of genuine progress rather than a warning of economic fragility.
- Lonwabo Mlawu, lecturer in financial reporting at Walter Sisulu and a PhD candidate in at the University of KwaZulu-Natal.