Market Update: ‘One bad decision can undo everything’: Kieswetter’s warning on SARS successor – Full Analysis

SARS commissioner Edward Kieswetter at a News24 and Standard Bank budget event in Cape Town on WEdnesday.

• Outgoing SARS Commissioner Edward Kieswetter has stressed the importance of finding the right successor to maintain economic reforms.
• Speaking at a post-Budget panel hosted by News24 and Standard Bank, Kieswetter also said that government had “execution problems” in combating the illicit economy, which had grown to R1.2 trillion by some estimates.
• Business Leadership SA CEO Busisiwe Mavuso also said that there was a huge risk in appointing the wrong president for the country – but reforms in key sectors have put SA in a different place to during the Zuma years.
• For more financial news, go to News24 Business.

As SA Revenue Service (SARS) Commissioner Edward Kieswetter prepares to retire in April, he issued a warning about choosing the wrong successor.

“One bad decision can undo everything.”

Speaking at a Budget event hosted by News24 and Standard Bank on Thursday, Kieswetter said it was crucial for the next commissioner to have integrity. This was particularly important at a time when the country’s economy had seemingly turned the corner and government had instilled fiscal discipline.

“My message to you is: Never take SARS for granted; don’t allow it to be captured by any political or other interests. Stand up and fight for the valuable office of the treasurer of our democracy. Without it, our democracy would be unfunded,” he said.

Kieswetter was speaking as part of a panel alongside Business Leadership SA (BLSA) CEO Busisiwe Mavuso, News24 writer-at-large Carol Paton, and Standard Bank chief economist and head of research Goolam Ballim.

From left: Bruce Whitfield, Business Leadership SA CEO Busisiwe Mavuso, Standard Bank chief economist Goolam Ballim, News24 writer-at-large Carol Paton and and SARS commissioner Edward Kieswetter..

Grant Pitcher, Gallo Images.

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Having previously served as the CEO of what was then Alexander Forbes (since rebranded as Alexforbes), Kieswetter was appointed commissioner of the revenue service in 2019 for a five-year term. His term was extended until April this year.

During his Budget speech this week, Finance Minister Enoch Godongwana thanked Kieswetter for his tenure, saying he had inherited a service that was hollowed out and close to non-functional. Under former Commissioner Tom Moyane, SARS was almost devastated by state capture.

Relations between Godongwana and Kieswetter have been strained at times, with a hot-mic moment in February 2025 last year revealing tensions about additional allocations to SARS.

On Wednesday, Godongwana said Kieswetter’s successor would be announced by April, after President Cyril Ramaphosa has reviewed the recommendation put forward by a panel headed by former finance minister Nhlanhla Nene.

State capture 2.0?

Speaking on the Budget panel, Mavuso expressed concerns around SA’s political outlook, with the potential appointment of Deputy President Paul Mashatile as the next ANC president, fearing more scandals and “State Capture 2.0”.

Mashatile is currently being named in investigations by the Hawks, the Special Investigating Unit, and the Public Protector.

However, she added that South Africa is in a much different place now than in the Zuma era.

Reforms during the Ramaphosa administration have unlocked private investment into the energy and water sectors and could help derisk the economy from political volatility.

READ | Market sold on Budget’s bullish debt forecast – but Moody’s ain’t buying it

“Should we have a State Capture 2.0… we can ensure that government presides over an economy which has less state dominance. Previously, they targeted SARS and 743 SOEs to siphon funds from the state.”

News24 journalist Carol Paton agreed that reversing market reforms in electricity and freight logistics wouldn’t be possible because there won’t be state alternatives.

Execution problem

Goolam Ballim, chief economist and head of research for the Standard Bank Group, says the Budget showed that South Africa’s fiscal position hads strengthened and confirmed why the spread between SA risk assets and other markets, including the US, has declined.

“SA has the cleaner of the dirty shirts,” says Ballim, who spoke of a shift from stabilisation to momentum.

SA is enjoying the best economic backdrop in a decade, thanks in part to higher international commodity prices, as well as low local inflation and declining interest rates.

Kieswetter believes the economy will properly shift into gear later this year, with stronger growth expected for the next few years.

Still, he believes government lacks meritocracy and has a serious execution problem. This includes the illicit economy and crime.

He cited studies that show the illicit economy has grown within the past 20 years from 5% of gross domestic product (GDP) to between 12% and 15% of GDP – between R800 billion and R1.2 trillion. This could have resulted in between R200 billion and R300 billion in taxes. “If we deal with the illicit economy, we will see a spurt in growth.”

He added: “The reason that we have limited impact on crime, corruption and illicit economy is that we have a fragmented approach in terms of effort and resource allocation. In the Budget, money is allocated to the SA Police Services and the SA National Defence Force, and the Border Management Authority, without understanding how much money has been allocated to crime and corruption. We allocate it to departments and not the phenomena.”

Looking forward, Kieswetter said that it was also important for government to improve the transition of skills and invest in human capacity to increase the employability of young people in the era of artificial intelligence (AI).

“As long as we declare the matric pass rate as a victory, we will have more unemployable young people. We need to look at how we prepare young people for the world of work. In the next two to three years, there will be a significant disruption by AI, which we see at SARS already, and how it fundamentally changes the way people work. If we cannot produce this, we will get left behind.”