The 2025 budget proposals are out at last! The good news is that VAT is not going all the way up to 17% (yet), but individuals will feel the fiscal drag due to a lack of inflation-based adjustments.

The first draft of the budget speech, released on 19 February 2025, proposed a 2% increase in the VAT rate to raise cR58bn. Today’s iteration indicates that cR28bn of additional revenue will be raised in the 2025/6 tax year with a further cR14.5bn in the 2026/7 tax year, sourced mostly from personal income tax and excise duties. This begs the question: how to bridge the gap?

Incentives

Renewable energy generating assets

The drive to promote the use of renewable energy generating assets is over.

• The two-year favourable 125% allowance for business in respect of renewable energy assets came to an end on 28 February 2025 and will not be renewed.
• Currently, businesses can claim an increased allowance of 100% of the cost of assets producing solar photovoltaic energy up to one megawatt. In 2024, Government announced that it will consider increasing the one-megawatt generation threshold. This has been abandoned.
• At present, allowances are restricted where a taxpayer leases the renewable energy assets. Whereas Government previously indicated that it would consider relaxing the limitations on leasing, this has now also been abandoned.

Promotion of investment in infrastructure projects

Government intends to release a consultation paper on investment vehicles that will allow a flow-through tax regime in order to promote institutional investment in infrastructure projects.

Urban development zone tax incentive

The sunset date of the urban development zone tax incentive, intended to promote inner city development, will be extended from 31 March 2025 to 31 March 2030 to allow planning and time to consult with municipalities.

Interest

Limiting interest deductions

The deduction of interest is limited in terms of the following two sets of rules in the Income Tax Act:

In terms of legislative amendments promulgated in 2024, the two sets of rules will be aligned to, amongst other things, limit the deduction of interest to 30% of ‘adjusted taxable income’. This caused great concern. The amendments will only come into effect on 1 January 2027. Government will review the amendments in 2025 with the potential of a proposal in the 2026 Budget.

The following further refinements to the rules are proposed:

• Government acknowledges that the extensive definition of interest in the rules causes complexities. This definition will only determine the amount of interest to which the rules apply. ‘Adjusted taxable income’ will be determined using the tempered definition of section 24J of the Income Tax Act.
• We can also expect clarification on how to deal with foreign exchange differences.
• A carve out for back-to-back lending arrangements where there is no controlling relationship between the ultimate lending institution and the debtor.

Preference share funding

Extending anti‐avoidance rules dealing with third‐party backed shares

Section 8EA is an anti-avoidance provision that states that dividends in respect of ‘third-party backed shares’ are subject to tax unless issued for a ‘qualifying purpose’. Government has identified structures that circumvent the anti-avoidance rules and proposes to introduce additional changes to section 8EA to address this.

Refining the definition of ‘hybrid equity instrument’

Section 8E is an anti-avoidance provision that governs the taxation of ‘hybrid equity instruments’ (equity instruments that have ‘debt-like’ characteristics). The current definition covers five classes of instruments, including preference shares. It has come to Government’s attention that the anti-avoidance rules (particularly the preference share portion of the definition) can be circumvented, and an amendment is proposed.

Corporate reorganisation rules

Listed share-for-share transactions

Section 42 governs asset-for-share transactions. The general rule is that where a seller disposes of an asset to a company in exchange for the issue of shares in that company, the company acquires the asset at the same tax cost that the seller held it at. A ‘tracing issue’ can arise in relation to listed shares, i.e. the acquiring company cannot reasonably be expected to know the tax cost of the listed shares (asset) held by each disposing shareholder (seller). For this reason, a specific provision was introduced in 2010. However, Government states that the policy intent for this provision was only to apply to sellers holding (disposing of) less than 20% of the listed shares in a target company and section 42 will be amended to reflect this intention.

Taxation of collective investment schemes (CISs)

A discussion paper on CISs was issued in 2024 with several proposals on how to tax these investment vehicles. Consultations will continue in 2025. Click here for more information.

Asset-for-share and amalgamation transactions

Shares can be transferred to a CIS using corporate tax rollover relief, whereafter realised gains are not taxed when the CIS disposes of the shares (e.g. as part of a corporate restructuring). The tax rollover relief provisions of section 42 and section 44 of the Income Tax Act as they relate to CISs will be reviewed as part of the broader CIS review.

Capital distributions

There is a proposal to consider the tax treatment of on-going capital distributions made by CISs to holders of participatory interests. This could result in an amendment to either section 25BA or paragraph 60 of the Eighth Schedule. Currently, holders of participatory interests are taxed on gains realised from the disposal of their participatory interests. This is done in terms of paragraph 60 of the Eighth Schedule. Neither section 25BA nor paragraph 60 address the treatment of capital distributions received by or accrued to participatory interest holders whilst they are still investors.

Insurers, brokers and banks

Taxation of long-term insurers

Since 2023, companies may only set off an assessed loss equal to 80% of taxable income. This has given rise to uncertainty regarding the ordering of deductions to calculate the taxable income of long-term insurers in respect of donations and transfers between its policyholder funds. Government will introduce amendments to provide clarity.

Section 24JB entities

It is proposed that dividends that accrue to covered persons (banks and brokers) in terms of section 24JB of the Income Tax Act in respect of equity investments made to hedge financial liabilities, will be taxed where the payments are deductible for tax purposes. Government states that this is to ensure alignment of the tax treatment.

Tax treatment of first after loss after capital (FLAC) instruments held by financial institutions

It is proposed that the tax treatment of FLAC instruments be clarified. FLAC instruments are unsecured debt instruments issued by designated institutions such as a bank or its holding company, a minimum of which must be maintained by these entities due to the systematic importance of these financial institutions.

Cross-border transactions

For 2025, the international taxation agenda will focus on progressing the two-pillar tax reform, supporting effective revenue collection, addressing inequalities in the taxation of high-net-worth individuals and improving tax certainty.

There is also an aim to expand South Africa’s tax treaty network and to renegotiate some existing treaties to strengthen economic and trade relations, prevent double taxation and tax abuse, and enhance regional cooperation. We anticipate the outcomes will focus on South Africa’s ability to access information of taxpayers with foreign interests and to collect a greater share of revenue on cross-border payments. In the case of the latter, interest withholding tax is currently 15% but reduced to 0% under most of South Africa’s tax treaties, including with the UK and USA.

In terms of technical amendments needed in the Income Tax Act, we note the following changes are proposed:

The definition of ‘equity share’ in section 1 of the Income Tax Act will be amended to cater to transfers by foreign companies. It seems that the aim of the amendment is refinement considering that there are already separate definitions for a ‘dividend’ and ‘foreign dividend’ and ‘return of capital’ and ‘foreign return of capital’ in the Income Tax Act.

An amendment will be made to the section 9H exit charge to ensure that application of the ‘high tax exemption’ set out in section 9D of the Income Tax Act cannot be applied to mitigate an exit charge where a foreign subsidiary acquires all the shares of its South African holding company, such that the foreign subsidiary and its underlying foreign companies cease to be CFCs.

Further, the high tax exemption applying to CFCs currently does not take into account tax systems of countries that allow a refund to certain shareholders of a foreign company for tax paid by the foreign company declaring a dividend (e.g. Malta). An amendment is proposed to take into account the tax refund to a shareholder in applying the high tax exemption.

With regard to the taxation of trusts and beneficiaries, an amendment is proposed to address the interaction between section 7 (being rules that seek to tax trust income in the hands of certain donors or settlors of the trust) and section 25B (being the rules that govern the tax treatment of trust accruals and distributions) in respect of income and assets vested in beneficiaries of trusts which could have unintended consequences where non-residents are involved.

In terms of section 24I of the Income Tax Act, if an exchange item, such as a debt, arises between a person and the other party that forms part of the same group of companies or are connected persons in relation to each other, the exchange gains or losses are not subject to tax until certain events arise, including that the exchange item is realised. It is proposed that the policy be reconsidered so that the deferred exchange difference is triggered only on the portion of an exchange item realised during the year of assessment. In addition, it is proposed to clarify the classification of debt that is not recognised in the financial statements for financial reporting purposes. Currently the aforementioned rules for postponing the taxation event apply to the extent that the exchange item or any portion thereof does not represent a current asset or current liability for the purposes of financial reporting pursuant to IFRS.

Financial sector update, including exchange control

We highlight below certain of the cross-border financial sector updates. The comprehensive list of updates can be located in Annexure E to the Budget Speech.

Only two action items of the 22 action items in the action plan agreed with the Financial Action Task Force (FATF) remain. The two action items relate to demonstrating a sustained increase in the investigation and prosecution of complex money laundering and terror financing. South Africa is working to address both outstanding action items by June 2025 to exit grey listing status by October 2025.

The Intergovernmental Fintech Working Group aims to finalise a crypto asset policy consisting of a set of regulatory recommendations in line with relevant international standards, that also includes a framework for cross-border crypto asset transactions. The policy will be published for public consultation during 2025.

Work has been completed to replace the Johannesburg Interbank Average Rate (JIBAR) with the South African Rand Overnight Index Average (ZARONIA). Government is, however, still working on measures to enable the smooth transition to ZARONIA which is likely to include the introduction of legislation that enables safe harbour provisions with protections for existing derivative contracts.

With regard to the capital flows management framework (i.e. exchange control), in the 2020 Budget Speech the late Minister Tito Mboweni made the following announcement:

“In this context, the Government proposes modernising the foreign-exchange system. Since 1933, South Africa has operated a “negative list” system. By default, foreign-currency transactions are prohibited, except for those listed in the Currency and Exchanges Manual. As a result, even small individual transactions – such as for travel – require onerous approval processes. This regime constrains trade and cross-border flows, particularly in relation to fast-growing African economies.

“Over the next 12 months, a new capital flow management system will be put in place. All foreign currency transactions will be allowed, except for a risk-based list of capital flow measures summarised in the box overleaf. This change will increase transparency, reduce burdensome and unnecessary administrative approvals, and promote certainty. The capital flow measures take account of the Organisation for Economic Co-operation and Development best-practice Code of Liberalisation of Capital Movements and are aligned with similar approaches in other developing countries.”

Notwithstanding, the rules remain and, as a result of scrutiny by FATF, investigations under these rules are seemingly at an all-time high. This year again we see limited changes, namely:

• The International Monetary Fund conducted a technical review of the increase of the prudential limit to 45% in 2022 (the 45% being the offshore investment limit for insurance, retirement and saving funds). The review stated that the increase could have been implemented in a more transparent and phased manner and recommended that the limit not be reduced as the reputational, implementation and administrative costs would outweigh any potential benefits. The limit will therefore remain as is.
• To support trade, Authorised Dealers, i.e. certain local banks, may allow resident agricultural commodity producers with firm commitments to hedge their foreign exposures on foreign commodity exchanges, provided suitable documentary evidence is produced and reported to the Financial Surveillance Department of the South African Reserve Bank.
• With regard to the use of one’s travel allowance, currently, unused foreign currency must be sold to an Authorised Dealer within 30 days of a traveller’s return to South Africa. Going forward, the traveller may deposit unused foreign currency into a foreign currency account at an Authorised Dealer within 30 days of their return.

Personal tax and employees

Tax rates and credits

Although the February version of the Budget proposed for personal income tax brackets and rebates to be adjusted to reduce pressure on lower-income earners and to provide partial relief for higher-income earners, this proposal was not retained in the revised Budget. This means that tax brackets and rebates will not be adjusted for the second year in a row. This is expected to raise revenue of R19,5bn.

Medical scheme tax credits remain unchanged at R364 per month for each of the main member and first dependant, and R246 per month for each additional dependant. While most taxpayers will be relieved that the credits have not yet been scrapped in preparation for the introduction of the National Health Insurance scheme, this is the second year in a row that the credits have not been adjusted.

Individuals and employment

The interest exemption for natural persons remains unchanged at R23 800 for persons younger than 65, and
R34 500 for persons who are 65 and older. These amounts have not been increased since 2013.

A number of amendments are proposed in respect of individuals:

• Section 20A of the Income Tax Act deals with the ring-fencing of assessed losses of certain trades. Government is of the view that this section currently creates a loophole, permitting taxpayers below the maximum marginal rate threshold to continuously offset losses from certain trades against other sources of income, resulting in inter alia full employees’ tax refunds. It is proposed that these rules be reviewed.
• The ordering of deductions where the taxpayer has an assessed loss (see taxation of long-term insurers above) is also relevant for taxpayers (natural persons and other taxpayers) claiming section 18A deductions for donations
• It is proposed that child maintenance payments made from after-tax income are excluded from the recipient’s taxable income. This is a welcome proposal which should help to avoid economic double taxation in respect of child maintenance payments.

The employees’ tax-related proposals appear to be administrative in nature and include proposals regarding:

• Employees’ tax withholding in respect of employee share schemes in a group context. These provisions will be reviewed to determine whether one company can act as a nominated employer in respect of all share scheme participants for purposes of complying with all employees’ tax obligations; and
• The ‘remuneration proxy’ concept is used to calculate certain fringe benefits. As this concept is defined with reference to ‘remuneration’ this could in certain instances (for example where an employee received exempt foreign income in the previous tax year) result in an unintended benefit. It is proposed that the definition be amended to include the exempt amounts.
• Employees are only entitled to claim the specific types of expenditure as listed in section 23(m), as deductions against remuneration. In terms of section 6quat, taxes paid to a foreign government can, in certain instances, only be claimed as a deduction and not be set off as a foreign tax credit. Currently, section 23(m) does not permit such a deduction. Government proposes to expand the ambit of the section to permit a deduction in terms of section 6quat(1C).

The value of the employment tax incentive (ETI) remains unchanged at a maximum of R1 500 per month in the first 12 months and R750 per month in the second 12 months of eligibility, but the eligible income bands will be adjusted with effect from 1 April 2025, to cater for adjustments of minimum wages since the last increase in the value of the ETI was in 2022. The adjusted formula will have the following effect:

• Employers will be able to claim the incentive at a rate of 60% of the wages below R2 500 per month, where such wage minimums are allowed due to existing exemptions.
• The maximum value of R1 500 per month will apply to employees earning between R2 500 and R5 500 monthly, up from R2 000 and R4 500 previously.
• The incentive value will decline as wages increase, tapering to zero at a monthly income of R7 500 (previously R6 500).

Retirement

• In what will be a blow for South Africa’s attractiveness as a retirement destination for foreigners, it is proposed that the domestic tax exemption for lump sums, pensions and annuities received by South African residents from foreign retirement funds for previous employment outside South Africa, will be scrapped.
• The two-pot retirement system came into effect on 1 September 2024 and the resultant withdrawals from members’ saving pots raised R11.6bn in tax, more than double the R5bn estimated in last year’s Budget. It is anticipated that withdrawals will continue, with many members withdrawing funds from their savings pots on an ongoing basis. Further changes may be required in respect of this system:
  • There have been calls for members to be permitted to access their retirement pots if they are retrenched and are in financial distress. Government will conduct research and engage stakeholders on this topic as part of a second phase of the two-pot reforms. 
  • In terms of current provisions, in the case of a deceased member, any savings component can only be paid as a savings withdrawal benefit. It is proposed that where nominees or dependants choose to receive a lump sum benefit, such lump sum benefit will constitute part of the retirement fund lump sum benefit for tax purposes.
• The Second Schedule to the Income Tax Act will be amended to ensure that it is aligned to the Pension Funds Act, 1956, to recognise orders pertaining to the division of marital assets in accordance with religious tenets 
• As part of the ongoing process to address the high levels of unclaimed assets in the financial system, the Financial Sector Conduct Authority (FSCA) released a comprehensive response to stakeholder feedback during March 2024. Government and the FSCA will work with industry to develop the recommendations from these papers, including a framework.

VAT

Government revised its original proposal relating to the VAT increase and the coming into effect of the increased VAT rate. Government had intended to increase VAT by 2% with effect from 1 April 2025. This proposal has now been revised. Now Government proposes to increase the VAT by 0.5% in the 2025 fiscal year with the new rate of 15.5% taking effect on 1 May 2025. To cushion low-income households from the impact of the VAT rate increase, Government proposes to expand the list of zero-rated basic foodstuffs. This expanded list will come into effect on 1 May 2025. A second 0.5% increase is proposed for the 2026/2027 fiscal year, to take effect on
1 April 2026. The Minister did mention that the second 0.5% increase may be reconsidered if Government’s ongoing fiscal control measures yield positive results.

Government also proposes to review legislation relating to the VAT treatment of low-value imports with the objective of achieving parity in the VAT treatment of low-value goods purchased online.

Relief in respect of asset-for-share and intra-group transactions

Proposal to amend section 21 of the VAT Act to make provision for the issue of credit or debit notes by a vendor that acquired an enterprise as a going concern in terms of an asset for share transaction or an intragroup transaction, where goods or services acquired as part of the transaction are returned to the transferee. Currently, the provision only applies to zero-rated transaction governed by section 11(1)(e) of the Act and not to transactions that are governed by section 8(25) of the Act.

Resolving practicalities

The proposals include several updates to VAT-related provisions aimed at resolving practical challenges and ensuring legislative clarity.

• The scope of the intermediary provisions is proposed to be expanded to include supplies made on behalf of local suppliers, under the same treatment as foreign suppliers of ‘electronic services’, allowing intermediaries to issue consolidated tax invoices.
• Changes to the VAT Act are proposed to address difficulties in tracing the origin of silver after the refining process, enabling depositors to comply with zero-rating provisions as defined in paragraph (a) and paragraph (d) of the definition of ‘exported’ in section 1(1) and regulations under section 74(1) of the VAT Act.
• Government also proposes amendments to the Export VAT regulations including proposed amendments to regulation 8(2)(e)(ii) of Part Two Section A of the Regulations (which govern ‘indirect exports’) to clarify and address various practical difficulties in the application of these provisions.
• SARS and Government propose a welcome alignment between the dispute resolution provisions provided for in the TAA and Customs and Excise Act to clarify which provisions should apply to import/ customs VAT disputes.
• Amendments to section 11(2)(l) of the VAT Act to clarify the zero-rating of testing services supplied to non-residents, particularly for services related to movable property situated in South Africa, will be looked into.
• Government proposes to amend the definition of ‘residue’ in the domestic reverse charge regulations to remove limitations that restrict its application to mining operations, in order to address challenges in distinguishing between mining-related scrap and other waste items.
• Following the Constitutional Court ruling in Capitec Bank Limited v Commissioner for the South African Revenue Service (CCT 209/22) [2024] ZACC 1, it is proposed that the definition of ‘insurance’ in the VAT Act be updated.
• The VAT treatment of temporary letting of residential properties under section 18D is recommended for review to simplify compliance. Additionally, amendments are proposed to address the VAT treatment of airtime vouchers sold in South Africa for exclusive use in a foreign country, clarifying their appropriate tax rates. Collectively, these updates aim to modernise the VAT framework, improve administrative efficiency, and address practical compliance challenges.

Carbon tax

Rate increases

• A proposal to increase the cardon tax rate to R236 per tonne of CO2 equivalent (previously R190)
• Carbon fuel levy will increase by 3c/litre

Proposals following stakeholder comments on discussion paper

• Extend section 12L energy efficiency initiative by five years to 31 December 2030
• Extend electricity price neutrality to 31 December 2030
• Increase carbon offset allowances by 5% from 1 January 2026
• Extend utilisation of carbon offset generated from projects approved prior to carbon tax introduction until 31 December 2028
• Retain 30% trade intensity threshold used to determine trade exposure allowance
• Maintain basic tax-free allowances until 31 December 2030
• Extend carbon budget allowance for voluntary carbon budget system until 31 December 2025
• Introduce greenhouse gas emission intensity benchmark of 0.94 t CO2e/MWh for the electricity sector from 1 January 2026 – for the performance allowance

Tax administration

Liability of representative taxpayers: an amendment confirming that the liability of a trustee of an insolvent estate extends to any income received or accrued to the insolvent person prior to the sequestration of the estate has been proposed.

Extending SARS’ powers to conduct site inspections: to curb VAT fraud and abuse, SARS proposes the extension of its inspection powers to include site inspections when voluntary VAT registration applications are submitted. The purpose of such inspections is ostensibly to verify that the enterprise business address given on the application exists and the premises are conducive to conducting the activities reflected on the application.

Clarifying the meaning of ‘bona fide inadvertent error’ for purposes of understatement penalties: following the judgments handed down in Coronation Investment Management SA (Pty) Limited v Commissioner for the South African Revenue Service 2024 (6) SA 310 (CC) (21 June 2024) and Thistle Trust v Commissioner for the South Africa Revenue Service 2025 (1) SA 70 (CC) (2 October 2024), SARS proposes to clarify the concept and scope of a ‘bona fide inadvertent error’ which SARS regards as ‘contentious’ despite the clarification provided by the Constitutional Court in these matters. It is proposed to explicitly link the concept of ‘bona fide inadvertent error’ with the 10% ‘substantial understatement’ understatement penalty category to correct the purported misalignment of this concept with the taxpayer behavioural framework.

Tax clearance status: the interaction between the current tax compliance status system and SARS’ entity scoring model will be reviewed to determine if synergies in approach can be achieved.

Public benefit organisations with section 18A status are obliged to obtain audit certificates if they carry on ‘mixed activities’ (both 18A and non-18A public benefit activities). It is not clear how the term ‘audit certificate’ should be interpreted and it is proposed that the term be clarified in the context of section 18A.

Transfer Duty

Whilst transfer duty rates will remain unchanged, the monetary thresholds for transfer duties will be adjusted by 10%. Click here for the updated transfer duty rates.

Alcohol and tobacco

Given the ongoing stakeholder discussions on the proposed policy amendments governing the taxation of alcoholic beverages, SARS has again imposed above-inflationary excise duty increases. This year excise increases will be 6.75 on alcoholic beverages (in line with prior years’ implementation of the existing policy), and 4.75% on tobacco products, including ‘vapes’ but excluding pipe tobacco and cigars, which are subject to a 6.75% increase. Except for these above‐inflation increases to excise duties on alcohol and tobacco products, tax rates remain the same.

Government is also proposing to change the effective date of future adjustments to excise duties to 1 April, with the aim of easing the administrative burden on implementing the adjustments on Budget Day.

Customs and excise

Health Promotion Levy

Government proposes the cancellation of the inflationary increase that was due to take effect from 1 April 2025, to allow the local sugar industry more time to adjust to restructure to regional competition.

Fuel taxes and levies

The General Fuel Levy, the Road Accident Fund Levy (RAF), and the Customs and Excise levy will remain unchanged for 2025/26, in partial mitigation of the VAT rate increase

Diesel refunds

Government proposes aligning the current diesel refund system with its original policy intent (which was to provide farming, mining, and forestry sectors with a refund of the general fuel levy and RAF levy on 80% of qualifying diesel purchases), by extending refunds on all eligible diesel purchases to SARS, effective 1 April 2026. This change aims to streamline the administration of the diesel refund system.

Ad valorem excise duty on smartphones

Government is proposing removing the 9% ad valorem excise duty rate on smartphones valued at less than R2 500, at the time of export, from 1 April 2025. The aim of the proposal is to enhance smartphone affordability and support efforts to promote digital inclusion for low-income households.

Administrative reforms

The 2025 Budget proposes a range of administrative reforms under the Customs and Excise Act 1964, aimed at improving tax compliance, enhancing enforcement efficiency, and modernising trade facilitation.

• SARS proposes the establishment of a voluntary disclosure program for customs and excise licensees. While the Tax Administration Act, 2011 already provides for voluntary disclosure in respect of other tax types, customs- and excise-related matters have so far been excluded.
• A significant amendment is proposed to section 40, to introduce greater flexibility in the timing of adjustments to bills of entry. This is intended to accommodate scenarios where businesses need to make corrections to their import/ export documentation but are currently constrained by rigid timelines and requirements. SARS proposes to allow the Commissioner to prescribe alternative timelines and mechanisms for such adjustments, including the adjustment of multiple entries via a single correction document, particularly in complex trade scenarios such as:
  • Transfer pricing adjustments, where multinational companies need to adjust import values after finalising their global pricing structures; and
  • Bulk export shipments, where invoice amendments may be necessary after goods have left the country.
• Government has indicated an intention to amend the diesel refund scheme to align more closely with the original policy intent of supporting the international competitiveness of primary industry (farming, fisheries, forestry and mining). SARS has indicated that changes to the Customs and Excise Act may be required to improve the efficiency and simplify the administration of the diesel refund system, effective from 1 April 2026. 
• The fuel industry in South Africa has undergone significant changes, with a shift from local manufacturing to increased imports of refined petroleum products such as petrol, diesel, and aviation kerosene. Importers have raised concerns about logistical challenges in transporting and storing fuel products, particularly through the national multi-product pipeline. SARS has proposed a review of fuel movement regulations to align them with industry changes, ensuring efficient storage and transportation of fuel levy goods. This may involve modifications to customs clearance requirements and storage facility approvals.
• SARS seeks to amend section 3 of the Customs and Excise Act to allow the delegation of customs functions to officials from other government institutions. This change will enable SARS to enter into agreements with other state organs or institutions and delegate customs enforcement responsibilities to their personnel. This amendment is particularly relevant for the implementation of SARS' new electronic traveller management system, which requires additional personnel to manage and enforce compliance at border posts and other points of entry. By granting designated officials customs enforcement powers, SARS aims to enhance efficiency in border control operations without overburdening its own workforce.
• To enhance transparency, accountability, and anti-corruption efforts, SARS is considering the deployment of body-worn cameras for customs officers. This measure aligns with broader Government efforts to combat corruption at border posts, where customs officials are frequently exposed to bribery and fraudulent activities.
• The administrative reforms under the Customs and Excise Act reflect modernisation efforts by SARS to improve tax collection, enforcement, and compliance mechanisms. Measures such as the voluntary disclosure program, enhanced bill of entry adjustments, and the deployment of body-worn cameras demonstrate a strategic focus on transparency and efficiency.

Written by the Bowmans Tax team in South Africa