Sars Plans New Tech to Curb Illicit Goods
The revenue service is seeking a private sector partner to manage a new tracking system for excisable goods.
Updated on Oct. 24, 2026 in Finance — General
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The South African Revenue Service (Sars) intends to implement a smart marker and counter system to monitor excisable goods and combat the growing illicit economy. The agency is currently searching for a private sector partner to design and oversee this new compliance ecosystem.
Why it matters
Sars aims to increase tax compliance by preventing manufacturers from keeping separate financial records and curbing the trade of illegal goods. This initiative seeks to address a massive shadow economy that threatens government tax collections.
The illicit goods economy in South Africa is estimated at R280 billion, while cigarettes priced below the R27.12 minimum tax per pack are found in nearly two-thirds of local retail stores.
The players
South African Revenue Service
Sars is the nation's primary tax-collecting authority responsible for the administration and enforcement of tax laws.
Enoch Godongwana
Enoch Godongwana is the Minister of Finance who is responsible for tabling the Medium Term Budget Policy Statement in parliament.
The details
The proposed system will utilise hack-proof markers on production lines, with data sent directly to the Sars tax administration database. This follows previous difficulties with cigarette counters installed in 2021, which were subject to tampering by manufacturers.
Timeline
Sars installed cigarette factory counters in 2021.
The Sars commissioner announced the search for a technology partner in October 2026.
An announcement regarding the illicit economy is expected in early 2026.
The government is scheduled to provide a programme update in the 2027 budget.
Market Dynamics
The new compliance system represents a structural effort to align with the National Illicit Economy Disruption Programme. This move signals a departure from traditional monitoring methods as the state attempts to regain control over excise tax leakage in a volatile fiscal environment.
The transition to a rigorous tracking system may impact retail pricing and product availability for consumers accustomed to low-cost, untaxed goods. Market participants should monitor how this technology affects the competitiveness of domestic manufacturers versus illegal importers.
The takeaway
Sars is shifting toward digital oversight to close the gap between legal tax requirements and the prevalence of illicit goods in the retail sector. Consumers and businesses should prepare for stricter production line monitoring as the agency targets the R280 billion shadow economy.
What happens next
The government is scheduled to provide a formal update on the National Illicit Economy Disruption Programme during the 2027 budget cycle.
Further reading
For more on how government policies affect national revenue, see Finance — General.
Source note: This article includes information reported by Business Day.
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Should the government implement stricter tracking and monitoring systems on all consumer goods production lines?
