Ramaphosa signs big tax changes for South Africa into law
President Cyril Ramaphosa has signed a new tax law that gives the South African Revenue Service (SARS) greater powers while also providing taxpayers with important avenues for relief.
The Tax Administration Laws Amendment Act, 2026, which was assented to on 31 March and gazetted on 1 April, makes several changes to how tax disputes, penalties and collections will be handled in South Africa.
This is the feedback from Tax Consulting SA, which noted that one of the biggest changes—and warnings—for taxpayers comes ahead of the 2026 filing season.
Taxpayers must be mindful not to fail to file their income tax returns or provide relevant information on time.
Should they fail to do so, SARS will issue an estimated assessment, under which the purported debt is immediately due and payable.
In practice, Tax Consulting SA said that this means the tax debt becomes immediately due and payable, even if the amount is inflated or simply wrong.
The independent tax firm stressed that this is a major risk because SARS has extensive collection powers.
It can attach bank accounts, garnish salaries, and even go after assets before a taxpayer has had a chance to fully prove that the assessment is incorrect.
Tax Consulting SA added that this makes it critical for taxpayers not to ignore SARS correspondence or filing deadlines.
However, the new law does offer some protection in these situations.
A key amendment to section 164 of the Tax Administration Act now makes it clear that taxpayers who request, or intend to request, a reduced assessment under section 95(6) can apply for a suspension of payment.
This means taxpayers may be able to temporarily stop SARS from collecting on the disputed amount while the revenue service considers whether the assessment should be lowered.
“On paper, this means that while SARS considers whether to issue a reduced assessment, the taxpayer may secure temporary relief from the immediate threat of enforced collection by SARS,” Tax Consulting SA said.
Other changes to take note of
Another important change is to understatement penalties, which are imposed when SARS believes a taxpayer has underpaid tax.
Before the changes, section 222(1) offered relief where the understatement resulted from a “bona fide inadvertent error”—in other words, an innocent mistake.
The new amendments do not remove that concept entirely, but they do narrow and clarify how it applies.
Tax Consulting SA said the updated law now makes it clear that this type of relief was really intended for cases of “substantial understatement”.
These are generally lower-level penalties rather than more serious conduct-based offences that can attract penalties of up to 200%.
If the understatement is linked to taxpayer behaviour that falls under the penalty table in section 223, the taxpayer must pay the understatement penalty in addition to the tax due.
In other words, a simple claim of innocent error will no longer be enough on its own in many cases.
Section 223(3) has also been amended to provide a clearer path for penalty remission in substantial understatement cases. SARS must remit the penalty if the understatement arose from a bona fide inadvertent error.
It must also grant relief where the taxpayer fully disclosed the arrangement on the return by the due date.
It must also have had a favourable independent opinion from a registered tax practitioner, issued by no later than the return deadline, supporting the legal basis of the tax position taken.
“This amendment emphasises full disclosure and professional tax advice as critical factors in penalty remission eligibility,” the firm said.
The law also includes several other procedural changes. Taxpayers will now generally need to give SARS at least 10 business days’ written notice before launching High Court proceedings.
SARS officials will also be able to inspect certain business premises without prior notice to verify identity, registration and compliance details.
There are also tighter protections around sensitive tax-related information and clearer rules for serving notices on companies.
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