{"id":871079,"date":"2026-08-20T10:50:06","date_gmt":"2026-08-20T08:50:06","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=871079"},"modified":"2026-08-20T11:03:51","modified_gmt":"2026-08-20T09:03:51","slug":"new-tax-laws-for-south-africa-put-into-effect","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/871079\/new-tax-laws-for-south-africa-put-into-effect\/","title":{"rendered":"New tax laws for South Africa come into effect"},"content":{"rendered":"\n

The National Treasury has put the Taxation Laws Amendment Act of 2024 into effect<\/strong><\/a>.<\/p>\n\n\n\n

The laws were signed by President Cyril Ramaphosa and promulgated in December 2024, but were not active.<\/p>\n\n\n\n

The Amendment Act makes various changes to South Africa’s tax laws, including the Income Tax Act, VAT Act and Acts governing tax incentives.<\/p>\n\n\n\n

Some of the more prominent changes are the introduction of electric and hydrogen vehicle incentives, which give a 150% tax deduction or investment allowance for new investments in the field.<\/p>\n\n\n\n

Another big change is the curbing of abuse of other incentives, specifically the Employment Tax Incentive.<\/p>\n\n\n\n

The government introduced the Employment Tax Incentive (ETI) in 2013 to encourage employers to hire young job seekers. <\/p>\n\n\n\n

The ETI reduced employers’ costs of hiring young people through a cost-sharing mechanism with the government, while leaving the wage the employee receives unaffected. <\/p>\n\n\n\n

The ETI commenced on 1 January 2014 and is due to expire on 28 February 2029.<\/p>\n\n\n\n

However, over the past few years, the government was forced to amend the ETI Act to curb abuse of the incentive through aggressive tax schemes. <\/p>\n\n\n\n

These schemes often involved training institutions claiming the incentive for students classified as employees under the ETI Act, who, however, never received cash payouts in their bank accounts. <\/p>\n\n\n\n

Instead, the training institutions would deduct training fees from their wages. <\/p>\n\n\n\n

“The misuse of the ETI for creating fictitious employment, primarily to exploit the incentive, contradicts the policy’s intention,” Treasury said.<\/p>\n\n\n\n

To address this, the new laws implement punitive measures, now extended in the legislation, that will force employers caught abusing the system to pay penalties to the Treasury.<\/p>\n\n\n\n

“It is essential to emphasise that millions of young South Africans are excluded from economic participation, resulting in high levels of unemployment, discouragement, and economic marginalisation,” Treasury said.<\/p>\n\n\n\n

“The primary purpose of the ETI is to encourage employers to hire young job seekers, providing them with a living wage and valuable work experience for future employability.”<\/p>\n\n\n\n

The new tax laws cover various other aspects, narrowing definitions, clarifying tax applications\u2014particularly cross-border tax\u2014and aligning the laws with the two-pot retirement system.<\/p>\n\n\n\n

An explanatory memorandum from the South African Revenue Service (SARS) about the laws can be read here<\/strong><\/a>.<\/p>\n\n\n\n

The full Act can be found below. The laws are in effect from 19 August 2026.<\/p>\n\n\n\n