Business-critical update - annual tax law amendments result in the requirement for the immediate appointment of a Public Officer, upon formation of a company! 

The recent updates to Section 246 of the Tax Administration Act, No. 24 of 2011 (“TAA”), effective 24 December 2024, removes the one-month window for appointing a Public Officer, bringing a critical shift for businesses across South Africa. Companies are now under pressure to appoint an eligible Public Officer, being suitable for the role, in the eyes of SARS.

With the latest changes, SARS now has the power to designate a suitable Public Officer, where the company has failed to appoint one, and the default hierarchical listing has yielded no positive result. 

This seemingly administrative change signals a seismic shift in the landscape of tax compliance and enforcement. For multinational enterprises, and South African companies alike, this means that any late or unsuitable appointment of an individual is no longer an option, and the era of non-compliance is over! 

Where a Public Officer has not been appointed, the clock is ticking!

Key Changes You Need to Understand

Tightening the noose, here’s what you need to know to ensure legislative compliance:

• 1st prize is the appointment of a person who is a senior official in the company and residing in South Africa. Where this is not an option, as is often the case for MNEs, the Public Officer will be another suitable person approved by SARS.
• Plan B: Where no Public Officer is appointed, the role is “regarded to be” fulfilled by the 1st person eligible to hold it, in order of priority, being the corporate hierarchy of the company concerned. This includes roles like managing director, financial director, or company secretary. 
• Where it gets interesting, is that in the alternative to the hierarchy, the Public Officer may “be any suitable person that SARS designates for that purpose”.
• Suitability: Should SARS regard the Public Officer as not suitable, the company will be regarded as having not appointed a Public Office, and therefore falling foul of section 246 of the TAA. A new Public Officer must then be appointed within 21 business days.

These amendments, amongst other, evidence that non-compliance isn’t just a minor administrative hiccup –SARS are sharpening their focus, and the amendments underscore one chilling truth: companies can no longer afford to take compliance lightly. This is not a mere procedural update—it is a targeted effort by SARS to close loopholes, improve oversight, and ensure that individuals handling company tax affairs are accountable and fall within their approval powers.

Fix Your Compliance or Risk Focus on SARS’ Radar

If your company hasn’t appointed a Public Officer, now is the time to act. Here's a step-by-step action plan:

1.        Review Eligibility: Ensure the appointed person meets SARS’ criteria. Where there are no eligible person residing in South Africa, proceed to step 2.

2.        Get SARS Approval: Secure prompt approval on another suitable person if you have no senior company officials within South Africa, and the order of priority has failed you.

Always keep SARS updated on any changes to your public officer promptly to remain compliant.

The new amendments to Section 246 of the TAA underscore a simple but powerful message: compliance is no longer optional; it is an essential component of doing business in South Africa. Appointing a Public Officer today ensures your business stays ahead of the regulatory curve. 

Ignoring these requirements could expose your business to unnecessary risks and legal complications, as the burden of ensuring compliance with South African tax laws has become far heavier. 

Engaging specialists who understand the intricacies of SARS’ requirements ensures your business remains compliant while minimizing operational disruptions. Take the proactive step to secure your company’s compliance and safeguard its future growth.

Written by Jashwin Baijoo, Associate Director and Head of Strategic Engagement & Compliance at Tax Consulting SA; and Tasneem Pandor, CIPC Secretary at Tax Consulting SA