No New Taxes Expected, But SARS Is Watching Closely
South Africans may avoid a tax increase in the upcoming budget, but experts warn that taxpayers shouldn’t breathe a sigh of relief just yet. According to Roxanna Naidoo, director of global strategy at Latita Africa Tax Advisory, the biggest change may not be new taxes but a government drive to collect more of the tax already owed, backed by increasingly aggressive SARS enforcement.
Why another tax hike looks unlikely
The Medium-Term Budget Policy Statement (MTBPS) is scheduled for 21 October 2026, at a time when government needs revenue but the economy is struggling:
- The economy contracted 0.2% in the second quarter of 2026.
- The Reserve Bank expects growth of only 1.2% for the year.
- The repo rate was raised to 7.25% in September as inflation pressures increased.
Naidoo said more tax increases would be hard to justify in this climate. Higher taxes could weaken consumer spending and business investment, even though government must raise revenue to support spending and manage debt.
The February 2026 Budget also offered some relief. It withdrew the previously planned R20 billion in tax increases, and personal income tax brackets and medical tax credits were adjusted for inflation after two years without it. That makes another substantial increase in October less likely, though Naidoo cautioned that taxpayers shouldn’t assume their overall burden will fall.
The catch: SARS is getting more data
Instead of raising rates, government could focus on collecting more of what’s already owed. SARS is receiving more information from financial institutions and other third parties, which lets it compare what taxpayers declare with independently reported data.
- International information exchange. In September 2026, SARS announced enhancements that bring e-money products, payment institutions and digital wallet platforms into the reporting framework. Requirements on tax residency, tax identification numbers and information on people who control entities have also been strengthened. SARS says this will help identify offshore non-compliance.
- Crypto assets. The Crypto Asset Reporting Framework took effect on 1 March 2026, requiring crypto asset service providers to collect user and transaction information for reporting to SARS.
- Pre-populated returns and auto assessments. SARS continues to use data from employers, financial institutions and others, and expected six million taxpayers to receive auto assessments in the 2026 filing season.
The practical point: what you declare on your return needs to match what SARS already has.
VAT is changing too
For businesses, Naidoo flagged SARS’s VAT modernisation programme. A consultation on a proposed digital VAT model closed on 16 October 2026. It includes electronic invoicing, electronic credit and debit notes, and digital reporting so VAT transaction data can flow in real time between businesses, service providers and SARS. The aim is better data quality, less fraud and stronger compliance, though the final design depends on the consultation.
If adopted, businesses may need accurate invoices, accounting entries and reconciliations at the individual transaction level, rather than focusing on VAT only when returns are due.
Enforcement is already visible. On 7 October 2026, SARS announced that 14 accused, nine individuals and five entities, had appeared in court over an alleged R3.99 million VAT refund fraud scheme, part of a broader investigation into suspected organised tax fraud.
Tax law changes in Parliament
The 2026 tax bills reflect a broader push to strengthen administration. Proposals include stricter documentary requirements for certain second-hand goods, mechanisms allowing banks to screen refunds, and interest relief in certain voluntary disclosure cases. Parliament was still considering Treasury and SARS responses to stakeholder submissions on 14 October.
Naidoo stressed that this doesn’t mean every taxpayer will face more scrutiny. But incomplete records, inconsistent declarations and unresolved tax obligations will become harder to overlook.
What to watch in the MTBPS
Naidoo encouraged taxpayers to look at Treasury’s proposed fiscal anchor, a principles-based framework requiring government to maintain sustainable public finances. It matters because the debt position shapes future revenue decisions. If Treasury can stabilise debt, maintain a primary budget surplus and control spending, pressure for broad tax increases could ease. If not, additional revenue measures may eventually be needed.
What you can do
- Check your records. Make sure income, assets and deductions are complete and consistent.
- Match your return to third-party data. Review pre-populated information before submitting.
- Resolve outstanding obligations with SARS rather than leaving them.
- Declare crypto and offshore holdings correctly.
- Businesses: prepare for transaction-level VAT record-keeping.
- Speak to a qualified tax practitioner if you’re unsure of your position.
The bottom line
A quieter budget doesn’t mean a lighter tax burden. With more data flowing to SARS and enforcement stepping up, the safest approach is accurate, complete and consistent records.
Source: Roxanna Naidoo, Latita Africa Tax Advisory, as reported by Daily Investor (21 October 2026).
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