‘I’m not at liberty at this point to discuss any taxpayer matter that goes beyond those periods because then I’ll be violating the confidentiality provisions.’
The newly appointed South African Revenue Services (Sars) commissioner, Johnstone Makhubu, said he wants to reserve his opinion on the Phala Phala report due to confidentiality provisions.
However, should the tax agency be called on to answer questions about the matter through official channels, he will do so.
Makhubu was delivering his first presentation to Parliament’s standing committee on finance on Wednesday, outlining SARS’ strategic and performance plans. He took office on 1 May 2026.
In March 2023, Sars confirmed that President Cyril Ramaphosa and his related entities were tax compliant and that income from the 2020 sale of game at his Phala Phala farm had been declared
MK party MP Des van Rooyen asked the commissioner whether he does not think that statement needs to be revisited following the Constitutional Court’s ruling.
MK unhappy with Sars
He said the MK party had made it very clear with Makhubu’s predecessor, Edward Kieswetter, that they were not happy with how the tax agency handled the matter, because it was apparent to the party that “there were serious tax law provisions that were undermined in that transaction”.
“From an ethical point of view, but also from compliance point of view with the laws of the country, more especially on issues of declaration of revenues and, of course, tax compliance status of individual taxpayers, we are not happy,” said Van Rooyen.
“Is there any different evidence that has emerged?” he asked. “That will obviously require SARS to revisit that particular response by your predecessor.”
Documents reviewed by Sars commissioner
Makhubu in response said he cannot speak about taxpayer affairs at this stage due to confidentiality provisions, but he has reviewed the document.
“On matters as Phala Phala, I think generally one wants to reserve opinion on this,” he said. “In as far as the taxpayer matters are concerned, I’ve taken time to review the documents that informed our decisions and our utterances.
“And one of the things I’ve found is that the consent that was given by taxpayers was very specific to time periods. And therefore, I’m not at liberty at this point to discuss any tax matter, taxpayer matter, that goes beyond those periods because then I’ll be violating the confidentiality provisions.{“
Tax agency will answer to formal structures
Makhubu added that at the moment what the tax agency can do is to watch what happens and when it is called on to respond to formal structures about the matter, it will do so.
“This said, I am not deviating again from my submission on the record that I will as long as I’m commissioner at Sars drive the independence of Sars, the autonomy of Sars, ensure that Sars acts in a manner that is without fear, favour or prejudice,” he added.
“And, I can only speak of my tenure at this point, but I can also assure you that this posture is not a Johnston Makhubu posture. It’s the posture that has been in this organisation.”
More funding needed
Makhubu, during his presentation to MPs said that Sars needs more funding to help close the tax compliance gap. He said that the R2 trillion that the tax agency collected in the previous financial year could have been higher.
The funding Makhubu is speaking of is the money that will close the gap between what Sars actually collected and what it should have collected if all the taxpayers were compliant.
He noted that there is potential to recover part of the country’s tax gap, estimated at between R350 billion and R450 billion. MPs were also informed that Sars received R43 billion less from the National Treasury than it had requested.
According to the figures, the tax authority asked for R191.4 billion in funding but was allocated R147.8 billion, resulting in a shortfall of R43.6 billion. The data further showed that in the 2024-25 financial year, Sars requested R22.2 billion but received only R13.8 billion.
Fight to collect R44 bn
He also told the standing committee of the issue of non-compliance by taxpayers who have contracts with the government. By end of March this year Sars was owed R44 billion by these individuals.
“You cannot benefit from the state and not be in good standing in terms of taxes,” said Makhubu. “My attitude is that if the debt has been longstanding and people have been getting frequent payments from the government, they ought at some point to suffer the consequences of their non-compliance.”
He added that the tax agency is working with provincial treasuries and the National Treasury to determine that when invoices are submitted to the government, Sars is alerted before any payment is made so that a third-party appointment can be effected in order to get the money before it reaches the individuals.
The R44 billion forms part of the total R66 billion in outstanding tax owed by entities having active contracts with government.