For years, South Africa’s voluntary disclosure programme (VDP) has allowed taxpayers to correct past defaults on Income Tax, Value-Added Tax (VAT), Pay-As-You-Earn (PAYE), and other mainstream taxes under the Tax Administration Act, No. 28 of 2011 (TAA). Often some of the riskiest and most heavily penalised areas of non-compliance, being Customs and Excise, were left outside the framework. That gap is finally closing.

The 2025 Draft Tax Administration Laws Amendment Bill (2025 Draft TALAB), published on 16 August 2025, proposes a groundbreaking reform, the insertion of Chapter XB into the Customs and Excise Act, No. 91 1964, creating a dedicated voluntary disclosure relief programme for customs and excise contraventions in respect of underpayments. 

What constitutes an “underpayment”?

The new framework casts a wide net. An “underpayment” covers not only unpaid or underpaid customs and excise duty, but also:

• Submissions that are inaccurate, incomplete, or missing altogether;
• Improper claims for rebates, refunds, or drawbacks knowingly made without entitlement;
• VAT shortfalls on imported goods; and/or
• VAT on locally manufactured goods subject to excise duty, the health promotion levy, or environmental levies.

In practice, this means both importers and domestic manufacturers will have a structured way to regularise defaults that might otherwise attract severe penalties or even criminal prosecution.

Relief on offer

A successful applicant who steps forward before the South African Revenue Service (SARS) comes knocking can secure meaningful relief. In return for full disclosure and payment of outstanding duties and interest, the Commissioner of SARS will:

• Undertake not to pursue criminal charges;
• Remit penalties;
• Waive forfeiture amounts that would otherwise apply; and
• Extend relief similar to that already available under the general VDP in the TAA.

The catch

Timing and honesty are everything. Relief will not be available once an audit, investigation, or enforcement action has started, unless SARS decides the disclosure concerns matters outside the scope of those actions. Disclosures must be voluntary, complete, and not designed to generate refunds. If material facts are omitted, SARS may withdraw the relief entirely, leaving the taxpayer worse off and with penalties imposed.

Why it matters

Customs and excise non-compliance has always been high stakes. Penalties can cripple businesses, and reputational damage can be devastating. Until now, there was no clear compliance “escape hatch” once errors were made. The new proposed VDP will offer a second chance, but it is one that must be seized early and honestly.

The message is clear: businesses involved in import, export, or manufacturing should review their customs and excise positions urgently. For those who identify historical underpayments, once enacted, the VDP under the customs and excise regime presents an opportunity to come clean before enforcement actions escalate.

Written by André Daniels, Head of Tax Controversy & Dispute Resolution at Tax Consulting SA