RISE Mzansi leader Songezo Zibi said on Wednesday that given the additional fiscal allocation to the South African Revenue Service (Sars), and the revenue momentum it achieved by the end of the previous financial year, there is scope for a revision of the revenue projection for the 2025/26 financial year.

Sars collected a net amount of R1.86-trillion during the fiscal year to end March 2025, which is R8.8-billion higher than the revised estimate, and R114-billion more than the prior year’s R1.74-trillion.

A record gross amount of R2.3-trillion was collected, representing year-on-year growth of 6.9% against estimated nominal GDP growth of 5.4% for the fiscal year.

In a letter to Finance Minister Enoch Godongwana, Zibi argued that Sars would be able to generate an additional minimum of R40-billion by December 31.

“…this would assume only 30% (R31-billion) of the R107-billion disputed debt (Sars collects over 80% of disputed debt), and 5% of the undisputed debt (R21.1-billion),” he explained.

He said there was, therefore, sufficient additional revenue to offset the value-added tax (VAT) and personal income tax measures, and as such could be substituted.

The letter to Godongwana follows a series of formal meetings – a multilateral Chief Whips’ meeting; bilateral political party meetings with the African National Congress; and a multilateral leaders’ meeting with the President – designed to get past the Budget deadlock and strengthen the Government of National Unity.

Zibi noted the delay in tabling the Budget and the controversy around the Fiscal Framework, which he said had tested the credibility of the country’s politics and caused real financial damage.

“If the Treasury determines that such additional revenue is entirely feasible, there would be sufficient fiscal headroom to revise the revenue assumptions in the fiscal framework. Although revising the framework so soon is not ideal, it is better to do this because of positive developments, and additional revenues are positive,” he highlighted.

He noted that assuming a resolution to the impasse will result in the effective withdrawal of the VAT revenue proposal and will simultaneously affect measures Godongwana has proposed to mitigate the impact of VAT, such as the expanded basket of zero-rated goods.

He explained that this would restore R2-billion to the bottom line, which would mean the total additional revenue needed amounts to just under R30-billion.

PUBLIC SECTOR, MILITARY & GAMBLING

Zibi also argued that the public sector was cost inefficient and did not derive value for money in the procurement of goods and services.

“It is therefore vital that the process of reviewing the efficiency of public sector spending commences immediately. The work done by National Treasury and the Government Technical Advisory Centre, the results of which have not been meaningfully applied, would serve as an interim report, while Parliament's Finance Committees work with you on an updated spending review,” the letter to Godongwana said.

RISE Mzansi believes that billions of saved rands can be directed towards critical services, instead of trying additional taxes.

Meanwhile, the party also urged Godongwana to engage with Minister of Defence and Military Veterans Angie Motshekga on the South African Defence Force’s mission in the Democratic Republic of Congo (DRC), saying it believes a minimum of R500-million could be saved by withdrawing the mission, depending on the timeline.

Zibi noted the Southern African Development Community’s decision to wind down the mission in the DRC, highlighting that the expected cost of supporting the mission should correspondingly reduce.

RISE Mzansi said it had also taken the lead in advancing gambling reforms that, among other things, seek to ensure that gambling activities, particularly online gambling, comply with all regulatory and tax requirements; and the party is also exploring the imposition of a sin tax.

“We believe that government is not moving quickly enough on this matter, while noting that some interventions will require legislative amendments,” said Zibi.