SARS Pays Out R239 Billion in Tax Refunds as Revenue Target Raised

The South African Revenue Service (SARS) has paid out more than R239 billion in tax refunds to taxpayers during the current financial year, while also exceeding revenue collection expectations set by the National Treasury.

The announcement follows the Medium-Term Budget Policy Statement (MTBPS), where Finance Minister Enoch Godongwana revealed that tax collections had outperformed projections made in the February 2026 Budget. As a result, Treasury has increased its tax revenue target to a record R2.144 trillion, up from the previously estimated R2.127 trillion.

Despite a weaker economic outlook and slower growth projections, SARS said it is confident in its ability to meet the revised target.

According to SARS Commissioner Johnstone Makhubu, the agency collected R992.2 billion in net revenue by 30 September 2026. This figure includes gross tax collections of R1.231 trillion and refund payments totaling R239.1 billion.

Revenue collections were R15.5 billion, or 1.6%, higher than the February Budget estimate and R67.4 billion above the amount collected during the same period last year.

SARS attributed the strong performance to the resilience of South Africa’s revenue collection system, even as economic growth forecasts were revised downward from 1.6% to 1.2% for 2026.

While improved electricity reliability has helped support economic activity, the tax authority warned that challenges such as logistics bottlenecks and infrastructure constraints continue to weigh on economic growth.

Alongside refund payments, SARS has intensified efforts to combat tax non-compliance. During the first six months of the financial year, compliance interventions generated a preliminary R137.7 billion.

This included R76.3 billion in direct cash collections and R61.3 billion recovered through measures aimed at preventing revenue leakage.

Makhubu said every rand recovered through compliance efforts helps protect honest taxpayers and strengthens the country’s fiscal position.

Looking ahead, SARS expects revenue collections to increase further during the second half of the 2026/27 financial year. The agency forecasts an additional R66.3 billion in revenue, driven mainly by Pay-As-You-Earn (PAYE), Corporate Income Tax (CIT) and domestic Value-Added Tax (VAT) collections.

Treasury’s revised estimate for the second half of the financial year now stands at R1.15 trillion. The adjustment is largely attributed to stronger corporate profitability, higher household spending and improved import growth.

Corporate tax projections were boosted by R11.7 billion following improved company earnings, while domestic VAT collections were revised upward by R2.5 billion due to stronger consumer spending. Customs duties are also expected to contribute an additional R2.2 billion as import growth accelerates.

However, SARS cautioned that achieving the revised revenue target will require continued compliance efforts, economic growth, investment and job creation.

The agency also highlighted ongoing global and domestic risks, including geopolitical tensions, supply chain disruptions and rising energy costs, which could affect future revenue outcomes.

Despite these challenges, Makhubu reaffirmed SARS’s commitment to collecting all revenues due to the state while promoting compliance and facilitating legitimate trade.