The National Treasury and the South African Revenue Service (SARS) have published the draft Tax Legislation Amendment Bill for 2026 (TLAB) and the draft Administrative Tax Legislation Amendment Bill (TALAB) for public comment. These documents contain a number of changes in taxation and administration that were announced in the 2026 budget.
The drafts were released on July 30, 2026, and are available for public feedback until August 28, 2026. After the consultation period concludes, the Treasury and Revenue Service will review all submitted proposals before finalizing the legislation and submitting it to Parliament.
According to information from Tax Consulting South Africa, the drafts include measures aimed at improving tax administration, closing loopholes in tax legislation, and making technical adjustments to existing laws.
The accompanying memorandum to TLAB describes the proposed amendments concerning personal income tax, savings and employment, business in general, business incentives, financial institutions, international tax matters, VAT, and the Carbon Tax Act.
Key Proposals in the Drafts
Among the key proposals outlined in the drafts are the following points:
- Donation Tax: The proposed changes will limit the exemption from donation tax between spouses if the receiving spouse is not a South African tax resident. The aim is to prevent the use of changing tax residency to evade donation tax and capital gains tax.
- Special Economic Zones (SEZs): New transfer pricing rules are proposed for certain transactions between SEZ companies and related entities outside the SEZ.
- Medical Programme Tax Credits: The proposals will expand the right to receive tax credits for members of certain limited medical programmes by incorporating the definition of these programmes into tax legislation.
- Controlled Foreign Companies (CFCs): Amendments are planned to align currency transfer rules between Controlled Foreign Companies and Internal Asset Management Companies. These changes are set to take effect on January 1, 2027.
- VAT and Used Goods: Additional documentation requirements are proposed for sellers of used goods to help reduce fraudulent VAT claims and bring requirements into compliance with the Used Goods Act and its regulations.
- Tax Refunds: Banks will be allowed to verify certain tax refunds before or after payment, which will help identify suspicious transactions and support SARS investigations.
- Tax Compliance Status: The legislative draft also provides for changes to address an issue in the Tax Administration Act, where taxpayers may not be recognized as proper taxpayers while applications for suspension of tax payments or relief from penalties are under consideration.
