ActionSA says its call for greater funding for the South African Revenue Service (SARS) — instead of increasing Value Added Tax (VAT) has been vindicated.
The party’s proposal to strengthen SARS’s capacity has paid off after the agency received an additional R4 billion earlier this year. According to the Medium-Term Budget Policy Statement (MTBPS) tabled in Parliament on Wednesday, SARS is now expected to collect about R19.7 billion more in revenue for the 2025/26 financial year than what was initially projected in the February Budget.
ActionSA says it has long argued that South Africa’s revenue problems stem not from insufficient taxation, but from the state’s inability to collect taxes efficiently due to years of underfunding and weakened institutional capacity. The party says this has contributed to an estimated R800 billion tax gap.
In a statement, the party said the improved revenue outlook showed the impact of investing in tax administration rather than burdening ordinary citizens through higher taxes.
“SARS’s improved revenue collection is not only a victory for ActionSA, but for all South Africans who deserve a government that manages their money efficiently before reaching for higher taxes,” the party said.
However, ActionSA expressed concern about the country’s sluggish economic growth, which was revised down to 1.2 percent for the year — far below the average growth rate of 4.2 percent among emerging economies and 4.1 percent in Sub-Saharan Africa.
The party blamed the Government of National Unity (GNU) for failing to implement a credible plan to stimulate growth, saying South Africa’s economic stagnation is largely self-inflicted.
The latest figures show that key industries have been under pressure, with construction contracting by 3.9 percent in the first half of the year, manufacturing by 1.7 percent, utilities by 1.6 percent, and transport and communications by 1.3 percent.
ActionSA also welcomed Finance Minister Enoch Godongwana’s renewed commitment to tackling illicit trade, which costs the country an estimated R100 billion a year in lost revenue. The illicit alcohol and cigarette trade alone is estimated to drain about R30 billion from the fiscus annually.
The party called on Treasury to ensure that SARS, the South African Police Service (SAPS) and the Border Management Authority (BMA) are adequately equipped to combat these illegal networks.
ActionSA further supported Treasury’s plan to implement spending reviews to improve efficiency, protect essential services, and create fiscal space for infrastructure investment. Treasury expects these measures to save R6.7 billion over the medium term.
However, the party urged the GNU to go further by adopting its proposed Cabinet Reform Package, which seeks to cut the number of deputy ministers and reduce ministerial perks to save an additional R4.5 billion.
ActionSA, which entered Parliament for the first time after the May 2024 national elections, has positioned itself as a strong opposition voice to the GNU. The party says it will continue to hold government accountable while offering evidence-based solutions to the challenges facing South Africans.
