Allan Gray sends auto-assessment warning to taxpayers in South Africa
The South African Revenue Service (SARS) is currently rolling out auto-assessments, but South African taxpayers have been warned not to blindly accept what the tax authority sends.
Allan Gray tax specialist Lihle Khumalo said that SARS continues to expand the use of its auto-assessments.
It uses third-party data from employers, financial institutions, retirement fund administrators, and medical schemes to pre‑populate one’s tax return.
Taxpayers selected for autoassessment will receive an assessment directly from SARS without having to submit a return upfront.
From 1 July to 12 July 2026, SARS will also notify taxpayers via SMS or email if they have been auto-assessed. The notification will also tell taxpayers whether they are due a refund or must make a payment.
Khumalo said that if you agree with your auto-assessment and are satisfied that the information is accurate, no return is required, as the assessment is issued automatically.
If the assessment reflects an amount payable, a taxpayer must ensure that the tax liability is settled by the due date indicated on the assessment.
For those who don’t agree with their auto-assessment due to incorrect or incomplete information, they should update and submit their tax return via eFiling or the SARS MobiApp.
As SARS relies on third-party data to pre-populate returns, taxpayers are unable to remove or overwrite this information where it is incorrect, specifically IRP5 certificates.
“If you identify errors in pre‑populated data, you may need to engage with the relevant third‑party provider to have the information corrected at source,” said Khumalo.
“This may delay the finalisation of your return, so it is advisable to review your pre-populated information as early as possible.”
While auto-assessments are designed to simplify the process, the tax expert warned that they don’t absolve a taxpayer of their responsibility to ensure their return is complete and accurate.
“A quick review can make the difference between a smooth filing experience and a costly correction later,” she added.
“Convenience doesn’t always mean accuracy: It remains your responsibility to review your assessment in detail before accepting.”
Who has to submit a return
While SARS can impose administrative penalties on those who fail to meet their filing obligations, not everyone is required to file a tax return.
One is generally required to submit a return if they earned income above certain thresholds, carried on trade or have more complex tax affairs beyond standard employment. For 2025/26, this includes:
- Your gross income exceeded the applicable age-based threshold
- You earned additional income beyond your salary, such as rental income or other business income
- You realised capital gains above R40,000
- You held foreign assets or funds above the prescribed limits
- You are involved in more complex structures, such as a trust
SARS can also specifically request that someone file a return, even if your income falls below the threshold.
“While auto-assessments mean that some individuals are not required to actively file, it is still advisable to confirm whether you meet the criteria for submission, particularly if your tax affairs are not straightforward.”
One may not be required to submit a return, especially if their affairs are straightforward and their income tax has been paid over to SARS by their employer. This includes:
- Salary from a single employer (not exceeding R500,000 for the year, where PAYE has been correctly deducted)
- Local interest income within the exemption thresholds (other than tax-free investment interest)
- Tax‑free investments
- Exempt dividends (for non‑residents)
- A single lump sum withdrawal or retirement benefit, where tax was correctly applied via a SARS directive
If one is selected for auto‑assessment, they may not be required to submit a return, provided the information used by SARS is complete and accurate.
For a taxpayer with income streams or more complex tax affairs, such as multiple sources of income or earned foreign income, they will likely need to file a return.
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