Tax

Two recent High Court judgments, in which the powers of the South African Revenue Service (SARS) came under close scrutiny, have delivered a clear message. Despite the wide powers granted under the Tax Administration Act, No. 28 of 2011 (TAA), those powers remain discretionary. However, they are not unfettered. This marks an important instance of court scrutiny of SARS’ powers.

Time has run out for non-compliant trusts. Since 4 May 2026, the South African Revenue Service (SARS) has imposed administrative penalties on trusts with outstanding tax returns. SARS levies these penalties monthly. In some cases, penalties may reach R16,000 per outstanding return.

Foreign nationals who own fixed property in South Africa and derive rental income from it are increasingly facing new compliance hurdles when accessing or transferring those funds. Recent feedback from multiple South African banks indicates tighter access to non-resident bank accounts when account holders do not meet additional tax compliance requirements. As a result, foreign property owners could temporarily find themselves out of pocket under these new banking and tax rules.

The amount South African residents can send offshore without South African Revenue Service (SARS) clearance has remained unchanged since 2011. However, that is about to change. On 25 February, Finance Minister Enoch Godongwana announced that the Single Discretionary Allowance (SDA) will increase from R1 million to R2 million per person each calendar year.

The South African Revenue Service (SARS) issued VAT Ruling: VR 020 – Consideration (VR 020) on 28 April 2026. The ruling addresses the Value-Added Tax (VAT) treatment of deposits received by game reserves when guests forfeit those deposits after cancelling bookings.

Two recent Tax Court judgments produced markedly different outcomes. These outcomes raised questions about condonation in the court. In particular, they highlighted uncertainty in how condonation principles apply. Practitioners often recognise this tension. However, case law rarely states it so directly.

The South African Revenue Service (SARS) recently surpassed R2 trillion in net revenue collection for the 2025/26 fiscal year. This milestone marks the highest revenue collected in the country’s democratic era. It also highlights SARS’s commitment to effective tax administration. In particular, SARS continues to enforce sanctions for non-compliance through SARS’ targeted compliance programmes. Despite several challenges, SARS has maintained strong performance.

The National Treasury’s long-awaited 2026 tax amendment Acts have now been promulgated. These 2026 Tax Amendments introduce a focused set of changes to South Africa’s Value Added Tax (VAT) and Income Tax frameworks. As a result, these amendments carry immediate practical consequences for taxpayers, employers and investors.

Recent communication by the South African Revenue Service (SARS) signals an increased focus on high-wealth individuals. It highlights how these individuals fund trusts, companies and similar structures. This applies especially where arrangements may trigger donations tax exposure.

Value-Added Tax (VAT) remains one of the most powerful revenue instruments available to the South African fiscus. In practical terms, it continues to rival personal income tax as a primary contributor to government revenue. It also remains indispensable to the South African Revenue Service (SARS)’s collection mandate. This reality matters.