Elle-Sarah Rossato | Partner | Tax Controversy and Dispute Resolution | PwC South Africa | mail me |
South Africa’s corporate tax environment is undergoing a significant transformation. As the South African Revenue Service (SARS) accelerates its modernisation agenda and sharpens its enforcement posture, businesses now face a dual reality.
Businesses experience improved efficiency through digital platforms. Yet they also confront increased complexity and scrutiny during interactions with the tax authority.
In this shifting context, SARS welcomed the Medium-Term Budget Policy Statement (MTBPS). The Minister of Finance, Enoch Godongwana, tabled the statement in Parliament on 12 November 2025. It revises the 2025 Budget net tax-revenue estimate from R1,985.6 billion to R2,005.3 billion. This adjustment underscores the government’s commitment to fiscal resilience and stronger revenue collection.
Our 2025 Taxing Times Survey reflects how taxpayers interpret these developments across the system.
Drawing on insights from 200 corporate taxpayers across 18 industries, our 2025 Taxing Times report captures the evolving relationship between SARS and the business community. It highlights both clear progress and several persistent pressure points.
A system in motion, but not without friction
SARS continues to streamline processes and embrace digital tools. However, many taxpayers still report difficulties when navigating audits, verifications and dispute resolution.
The Taxing Times Survey reveals a tax authority that is evolving rapidly, but also highlights gaps in consistency and communication.
The numbers behind the narrative:
- Audit and verification timelines improved. Thirty-one percent of respondents indicated that their audits were finalised within 1–3 months. This increased from 28% in 2024.
- Transfer pricing remains challenging. Seventy-four percent of audits take more than a year to conclude. Additionally, the use of the Mutual Agreement Procedure (MAP) and the number of dispute settlements both continue to increase.
- Understatement penalties (USP) concern many taxpayers. Fifty-nine percent of respondents who viewed SARS as aggressive in applying USP said SARS cited section 223 of the TAA. However, they felt the approach remained overly forceful.
- VAT-refund processing within 21 days improved, but verification delays still strain cash flow.
- Alternative Dispute Resolution (ADR) remains widely used and effective. Seventy-six percent of participants reported benefits such as reduced penalties and interest.
- Suspension of Payment Requests (SOP) is now addressed and approved more consistently. Forty percent of participants confirmed this improvement.
- Voluntary Disclosure Programme (VDP) rejections increasingly stem from refund positions and recent defaults. According to the Taxing Times Survey, this reflects a shift in SARS’ approach.
Technology’s promise, but adoption lags
SARS’ investment in automation and AI is beginning to reshape taxpayer interactions. Even so, adoption of the AI chatbox remains low.
Only 5% of respondents reported using the feature. Yet 70% of those who tried it found it helpful. E-invoicing (VAT) is still in development. Once implemented, it is expected to significantly improve verification and refund turnaround times.
Trust, transparency and the human element
Despite digital progress, many taxpayers continue to experience inconsistent audit practices, vague communication and limited procedural transparency.
Trust in SARS remains unchanged for most respondents. Mixed feedback persists on service delivery and the effectiveness of relationship managers. The Taxing Times Survey emphasises that digital efficiency alone cannot replace clearer communication and relationship support.
Pillar II – global tax reform reaches South Africa
The survey also captures taxpayer sentiment about the OECD’s Pillar II initiative. Pillar II introduces a 15% global minimum tax rate for large multinational enterprises that meet a revenue threshold of €750 million or more.
While 38% of participants understood the aim of Pillar II, nearly half expressed little concern about its impact. This suggests early alignment. A quarter of respondents have already appointed advisors to assist with compliance. These actions show a proactive approach to navigating global tax reform.
VDP – a shifting threshold for relief
The Voluntary Disclosure Programme (VDP) remains a valuable tool for regularising tax affairs. However, the criteria for acceptance continue to evolve. The most common reasons for rejection this year include being in a refund position or having a similar default within the past five years. This marks a departure from previous years, where voluntariness and completeness were the main barriers.
A substantial 79% of participants who used the VDP indicated that it helped them declare defaults properly. It enabled them to correct assessments and avoid understatement penalties.
Findings from the Taxing Times Survey reinforce the importance of understanding SARS’ expectations and preparing robust applications to avoid delays or denials.
A call for balanced reform
We’re seeing a more agile SARS, but also a more demanding and information-rich one. Taxpayers are adapting to a more complex and data-driven environment. However, the system and its people must evolve in parallel.
Effective reform requires balancing enforcement with transparency and support. This report is not just a reflection of taxpayer sentiment, it’s a roadmap for reform. We hope it sparks meaningful dialogue between SARS and the business community.
