The South African Revenue Service is extending compliance work into the informal economy, with the taxi and e-hailing sectors named as priority targets and spaza shops likely to follow. Finance minister Enoch Godongwana said the revenue service was improving registration, filing and payment in areas where compliance remains low, using third-party data, digital platforms, taxpayer education and simplified registration. The spaza sector is estimated to turn over between R180bn and R207bn a year.
The results so far are modest. Since the 2024/25 financial year, data-driven interventions have brought 21,890 previously unregistered informal-economy taxpayers onto the register, generating R314m in additional revenue. That works out at roughly R14,300 for each taxpayer registered.
Applied at scale the arithmetic stays small. Trade Intelligence counts about 150,000 spaza shops nationally. At the yield achieved so far, registering every one of them would produce in the region of R2.1bn, equivalent to about 1% of the sector’s estimated turnover and a fraction of a percent of national revenue collection.
| Measure | Figure |
|---|---|
| Estimated spaza sector turnover | R180bn to R207bn a year |
| Informal FMCG market, 2025 | R220bn, up 5.9% |
| Informal taxpayers registered since 2024/25 | 21,890 |
| Revenue generated | R314m |
| Average per taxpayer registered | About R14,300 |
| Estimated number of spaza shops | About 150,000 |
| Compulsory VAT registration threshold, from 1 April 2026 | R2.3m, up from R1m |
| Turnover tax tax-free threshold | R600,000 |
| Customs seizures, 2024/25 | 10,142, worth R6.3bn |
| VAT fraud and illicit gold recovered | R6.1bn |
Tax policy has meanwhile moved in the opposite direction. From 1 April 2026 the compulsory VAT registration threshold rose from R1m to R2.3m, while the turnover tax threshold increased to the same level and the tax-free portion was adjusted to R600,000. A spaza shop turning over less than R600,000 a year can register for turnover tax and owe nothing at all.
That gap between effort and yield suggests the exercise is about visibility rather than immediate collection. Registration creates a trading record, a verifiable history and a data trail that support later enforcement, and that also open access to bank credit, supplier terms and formal wholesale channels. The revenue follows the data rather than the other way round.
The scale of the sector explains the interest. Trade Intelligence values the informal fast-moving consumer goods market at R220bn in 2025, up 5.9% from R207bn the previous year. Roughly 11.1-million South Africans buy groceries through these outlets, which account for around 40% of the food purchased annually in the country. NielsenIQ recorded R43.1bn in traditional trade sales in the first quarter of 2026 alone, and there are more than 140,000 traditional trade outlets against approximately 11,000 modern ones.
Practical obstacles remain. Compulsory spaza registration was introduced in December 2024 and has run alongside municipal interventions targeting unlicensed operators and foreign-owned shops. Tax registration requires identity documentation and banking details, and where ownership sits with foreign nationals lacking qualifying documentation, registration is not merely an administrative decision.
The taxi sector offers a template for how this is likely to proceed. The South African National Taxi Council has said the industry is not opposed to taxation but wants its formalisation and corporatisation process to determine how operators and drivers are brought into the system. Similar sequencing arguments can be expected from spaza representatives.
Godongwana also pointed to wider enforcement work against illicit financial flows, citing 10,142 customs seizures worth R6.3bn in 2024/25 and R6.1bn recovered in relation to VAT fraud and illicit gold trading. Separate research commissioned by the Consumer Goods Council of South Africa put the illicit economy at R280bn, costing R126bn in GDP, 87,000 formal jobs and at least R68bn in tax.
The distinction between those two categories matters. A spaza shop selling legitimate goods without a tax number represents a compliance gap. Counterfeit and smuggled goods represent a criminal one, and the interventions each requires are not the same.