South African businesses should take note of a new tax administration proposal published on 16 October 2026. SARS has released the explanatory summary of the proposed Tax Administration Laws Amendment Bill, 2026. The Bill is intended for introduction in the National Assembly, which means the measures remain proposals and are not yet enacted law.

For SMEs and finance teams, the summary points to potential changes across provisional tax, payroll, VAT documentation and tax administration. Businesses should monitor the Bill’s progress while strengthening the underlying records that support their tax positions.

What the proposed Bill covers

The explanatory summary identifies several proposed amendments to the Income Tax Act. These include excluding certain exempt entities from the definition of provisional taxpayer and introducing an additional requirement for non-resident employers that must withhold employees’ tax.

The proposal would also adjust the taxable-income threshold used when calculating a penalty for underestimating provisional tax. The summary states that, for this purpose, the estimate could be deemed to equal the amount paid in relation to the estimate, or nil where no payment was made, unless the Commissioner is satisfied that the non-payment was not intentional or negligent.

These measures are proposals only. They should not be treated as a new provisional-tax calculation rule until the legislative process is complete and the relevant provisions take effect.

Potential VAT and record-keeping implications

The Bill proposes additional information requirements for tax invoices relating to second-hand goods that are subsequently supplied by a vendor. It also proposes expanded documentary requirements for second-hand goods.

Businesses dealing in second-hand goods should therefore review whether their accounting systems retain sufficient information about acquisitions, supporting documents and onward supplies. This is a practical control review rather than a new legal requirement at this stage.

The summary also proposes removing the distinction between the dates for submitting VAT returns and paying VAT for electronic and non-electronic vendors. The effect of this proposal should be assessed carefully once the final wording and commencement provisions are available.

Tax compliance and penalty administration

Proposed amendments to the Tax Administration Act include changes affecting administrative-penalty remission, SARS collection steps and tax compliance status. The Bill would allow a taxpayer’s tax compliance status to be indicated as compliant while a request for remission of an administrative non-compliance penalty is being considered, subject to the final legislation and applicable conditions.

It also proposes allowing taxpayers to apply for remission of interest under a tax Act where they have applied for voluntary disclosure relief. These provisions may be relevant to businesses resolving historic compliance issues, but they should not be relied on before the final rules are confirmed.

What businesses should check now

  • Review provisional-tax estimates and retain evidence supporting revenue, expenses and cash-flow assumptions.
  • Confirm that payroll records support PAYE calculations, particularly where a non-resident employer or cross-border arrangement is involved.
  • Check that second-hand-goods purchase files contain supplier, acquisition and supporting-document information.
  • Keep SARS correspondence, payment records and penalty-remission applications in a central compliance file.
  • Track the Bill’s progress and distinguish proposed provisions from enacted requirements.

Businesses should continue applying the current tax rules until any amendments are passed and brought into effect. Finance teams that need help reviewing tax records, VAT documentation or compliance controls can explore Your Financial Partner’s accounting and tax services.