How Funding Budget 3.0 Will Impact You: Project AmaBillions

“We accept the responsibility to achieve the 2025/26 revenue estimate presented by the Finance Minister Mr Enoch Godongwana.” (SARS Commissioner Edward Kieswetter)

Removing the contentious proposed VAT increases from Budget 3.0 led to a shortfall in revenue that necessitated new revenue sources.

One of these is the inflation-linked fuel levy increases of 16c for petrol and 15c for diesel, which became effective on 4 June and will impact all individuals and entities in the country.

Another alternative revenue source is going to come from SARS’ upping its collection of outstanding tax debt – with Treasury expecting an additional R20 billion to R50 billion per year from intensified debt collection efforts.

The tax measures contained in Budget 3.0 will raise an additional R18bn in 2025/26. A further R20bn in as-yet-unknown tax measures are postponed to Budget 2026 – unless SARS collects an extra R35bn in outstanding taxes.

SARS has accepted the challenge and Budget 3.0 allocated a further R4 billion to SARS to fund the debt recovery. (In addition to the R3.5bn previously allocated to the cause.)

‘Project AmaBillions’?

In what the media refers to as “Project AmaBillions” and what SARS calls its “compliance programme”, an intensified effort will be made to collect a greater slice of the estimated R800 billion in unpaid taxes – the so-called “tax gap”.

SARS reported that just over R400 billion of the tax gap consists of undisputed uncollected debt. The rest is made up of a further R100 billion in debt currently under dispute, more than 54 million returns outstanding dating back several years, and 156,000 South Africans with substantial economic activity who are not registered taxpayers, or are not filing their tax returns. SARS says that it will focus on the undisputed debt, while accelerating work on collecting all debt by dutifully implementing its compliance programme.

In the last financial year SARS recruited and trained more than 800 new employees to collect debt, mainly via telephone calls and legal instruments. These efforts, says SARS, must result in a minimum collection of R20 billion.

To meet its revised revenue estimate this year, SARS is:

Closing the tax gap, with a focus on undisputed debt.
Broadening the tax base, targeting hard-to-tax sectors in the informal economy, particularly small enterprises and self-employed individuals.
Using advanced data analytics and artificial intelligence to detect tax-compliance risks and improve overall compliance rates.
Combating the illicit economy.

How does it affect me?

As SARS significantly steps up its revenue collection efforts, those eligible to pay tax – whether registered taxpayers or not – can expect less lenience and more SARS queries, verifications, audits and collection efforts.

In fact, the South African Institute of Chartered Accountants (SAICA) has been quoted in the media warning that the pressure on SARS to collect significantly more tax this year may result in “heavy-handedness” by SARS in its treatment of taxpayers.
SARS confirms that it upholds the rights of taxpayers to exercise their rights in law, which include among others, asking for payments to be deferred or paid in instalments, or to dispute the debt.

Taxpayers must also be wary of scams – the well-publicised increase in debt collection activity at SARS will be matched by an increase in financial scams by fraudsters pretending to be SARS employees or appointed debt collectors.

How we protect your interests

Even with SARS’ well-funded and intensified focus on compliance and debt collections, our specialist tax team will continue to ensure that your interests remain protected.

Our up-to-date tax expertise and best practices ensure you have clarity on your specific tax obligations, and that all these tax commitments are met accurately and timeously.

We can confirm the legitimacy of any SARS communications to protect you from scams and respond promptly and professionally to legitimate enquiries on your behalf. This includes swiftly rectifying any non-compliance issues, and handling demands for outstanding tax debts correctly.

We also monitor that SARS follows the correct legal processes – including adhering to timeframes and procedures in respect of assessments, refunds, dispute resolution, and instituting debt collection measures such as unauthorised bank account withdrawals – to ensure your taxpayer rights are respected.

As Project AmaBillions intensifies, you can count on us to have your back!

Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.