Sars targets R50 billion as it hires 1,700 debt collectors

THE SOUTH African Revenue Service (Sars) is set to bolster its debt collection capabilities significantly, announcing plans to hire 1,700 debt collectors in the 2025/26 financial year.

This strategy is part of a concerted effort to improve revenue collection and recover debts in light of ongoing fiscal challenges.

Commissioner Edward Kieswetter announced this while addressing the joint committees of finance and appropriations on Friday.

“We have already employed 500, used the month of April and early May to train them, to induct them, to get them going, and they will now start collecting debt. In addition to that, next week, June 1, we will bring in a further 250 and continue to ramp that up,” he said.

Kieswetter also said their commitment was that they expected to yield at least R20 billion from that Debt Recovery Project.

“But our aspiration is to go much closer to R50 billion as far as that is concerned. So you should see next year a significant step up ahead of inflation, just on the debt recovery.”

In his Budget, Finance Minister Enoch Godongwana allocated R7.5 billion to Sars over the next three years to increase the effectiveness in collecting more revenue.

National Treasury’s Budget documents said the funding will focus on using technology, data science, and artificial intelligence to improve efficiency and transparency in tax administration.

Kieswetter said the current revenue projection did not include the current projection of revenue that will be derived from the Focus Debt Recovery Project.

“The minister has indicated that over the next six months, as he builds confidence, it will provide him the opportunity to consider how much of that he would like to include, both in the in-year but also out-of-year budgets.”

He told the MPs that the Debt Recovery Project had a ring-fenced allocation in the previous financial year to focus on revenue recovery. 

“Some of that we applied very specifically to debt recovery, spent just over R300 million in the last financial year, and we were able to employ just short of about 760 additional employees on a project basis, train them up, and get them to use our systems.”

He said the cohort of debt collectors hired last year delivered just short of R25 billion, which was included in the revenue outcomes of last year.

Sars’s final unaudited revenue outcome for 2024/25 stood at R1.86 trillion.

Systems need to be modernised

Kieswetter said the first year of the Debt Recovery Project has confirmed their view that revenue administration was integral to the fiscal integrity of South Africa and should not be taken for granted.

Commenting on the modernisation of Sars, he said it was integral to the quality, the efficiency, and the effectiveness of their compliance programme. 

“A significant amount of that is the work that Sars performs through auditors, investigators, and debt collectors to follow up not only service-related issues, but also non-compliance-related issues. Cumulatively, that work yields additional revenue, which, if not done, will not be collected.”

Kieswetter said their work required systems to be modernised. 

“When we come to Parliament to present our strategic plan, we will share with you that we have identified eight very specific modernisation initiatives, work streams, which are currently not funded. The one is an investment in our people to prepare them to work in an age of artificial intelligence, in addition to upskilling our people in terms of complex technical investigative work," he said.

“Another is work that we are currently doing, partially funded, is the digital identity that we are working with Home Affairs and others across government, because we believe that as a whole of government benefit, if every citizen, every entity has a unique identifier and can be seen in the system, then there is within Sars the ability to create a more modernised case management system, enhancing that with comprehensive management of a taxpayer account, a greater use of data science and artificial intelligence to enhance our compliance risk modelling, working with the Reserve Bank on the instant payment system, a very focused need to invest in that administration system.”