We have made it through tax silly season – and with a Budget delivered!
Tax issues
Budget 2026
The big news of the Budget is obviously all of the amendments to the monetary amounts. A table is attached below outlining all of the changes that were proposed and tabled during the Budget Speech. It makes for interesting reading, particularly when one sees how old some of these amounts are.
A few other key highlights:
- The Discretionary Allowance for Excon was increased to R2 million
- The trigger for the underestimation penalty will be increased to R1,8 million from R1 million
- SARS is intending to review how the underestimation penalty is triggered and intends to link it to non payment rather than non submission of returns – effective date 25 February 2026
- Donations between spouses to be limited to donations between resident spouses effective 25 February 2026
- Schools will need to start paying their deregistration output VAT in 12 instalments starting 1 January 2027.
Diesel rebate
Effective from 1 April 2026, primary sector claimants operating onland will be entitled to claim a refund on 100% of eligible diesel used in qualifying farming, forestry, and mining activities. This amendment streamlines the administration of the Diesel Refund Scheme. To ease the transition, the new rate, which is effectively applied from the April 2026 return, will reflect only from the calendar month when this VAT return must be submitted, i.e. May 2026. For more information, see the letter to stakeholders.
Trusts
In an effort to increase the compliance levels of trusts, SARS has issued final demands to trusts who did not submit an annual tax return for the 2024 and 2025 years of assessment. In terms of section 210(2) of the Tax Administration Act, SARS will shortly issue the related public notice for the imposition of administrative non-compliance penalties for trusts. It is important that those in receipt of such final demands as referred to above, take steps to correct the non-filing of the annual income tax returns within the period before the administrative penalties will be raised. SARS notes that, subsequent to the issuance of the final demand, several trusts have already taken steps towards improving their tax compliance. SARS supports and appreciates these efforts. It is reiterated that all trusts, whether economically active or passive, are required to submit annual income tax returns in accordance with the requirements set out in the public notice. This obligation is an operation of law and is applicable to every registered resident trust (without exception) and certain qualifying non-resident trusts.
Please remember that trustees are responsible for all SARS returns as well as ensuring that the correct trustees are recorded with SARS.
