President Cyril Ramaphosa has signed the Tax Administration Laws Amendment Act 4 of 2026, one of three tax-related Acts that SARS said were promulgated on 1 April 2026. The change matters because it updates how the South African Revenue Service can inspect premises, how taxpayers can seek relief from estimated assessments, how understatement penalties are applied, and how High Court action against the Commissioner must begin. It is not, however, a broad tax-rate increase for households. Treasury’s 2026 Budget Review separately said the previously pencilled-in R20 billion tax increase for the 2026 Budget was withdrawn and that personal income tax brackets and medical tax credits would be fully adjusted for inflation.
What we know so far
The official legislative trail is clear. Parliament’s Tax Administration Laws Amendment Bill B29-2025 said the measure would amend the Income Tax Act, the Customs and Excise Act, the VAT Act, the Tax Administration Act and the Global Minimum Tax Administration Act. SARS then published a notice on 2 April 2026 stating that the Tax Administration Laws Amendment Act 4 of 2026 had been promulgated on 1 April 2026 in Government Gazette 54447.
The most important taxpayer-facing change is around estimated assessments. The bill text shows that section 164 was amended so that a taxpayer may ask a senior SARS official to suspend payment not only when the taxpayer intends to dispute or disputes the liability under Chapter 9, but also when the taxpayer intends to request, or has requested, a reduced assessment under section 95(6). The memorandum on the bill explains that this was intended to make explicit a form of relief that SARS had already allowed in practice when taxpayers tried to correct estimated assessments after filing late or responding late to information requests.
The same bill also tightened and clarified the understatement penalty framework. Section 222 was changed so that an understatement penalty is imposed only where the understatement involves behaviour listed in the section 223 penalty table, while section 223 was amended so that SARS must remit a penalty for a substantial understatement where the error was bona fide and inadvertent, or where disclosure and an independent tax practitioner’s opinion meet the statutory conditions. The bill memorandum says the purpose was to link the “bona fide inadvertent error” concept explicitly to substantial understatement and to make the regime more coherent.
Why it matters
For ordinary taxpayers and businesses, the practical consequence is not that rates suddenly jump, but that administration becomes harder to ignore. If a return is not submitted or relevant material is not provided when SARS asks for it, the law already allowed assessments based on estimates in certain cases. What is new in the amended text is the explicit pathway for a taxpayer to request suspension of payment while asking SARS to reduce that estimated assessment. That gives a clearer procedural route, but it does not remove SARS’s discretion, and it does not cancel the need to respond quickly and properly.
The law also expands inspection powers in a targeted way. The amended section 45 says a SARS official may, without prior notice, arrive at premises where there is a reasonable belief that a trade or enterprise is being carried on, and may inspect only limited issues such as the identity of the occupier, whether the occupier is registered for tax, whether an applicant’s physical address exists and is suitable for the activities in the application, and whether the person is complying with sections 29 and 30. The memorandum says this expansion is aimed at curbing fraud and abuse linked to VAT registration, employment tax incentive registration and approvals for tax-privileged status such as the ability to issue section 18A donation receipts. It also states that if business is conducted from home, only the part used for trade may be inspected.
Another change affects litigation strategy. The amended section 11(4) requires at least 10 business days’ written notice, in a prescribed form, before legal proceedings are instituted in the High Court against the Commissioner, unless a court directs otherwise. The memorandum says the point is to standardise the notice and give SARS an opportunity to address issues before parties move into costly litigation, while leaving the courts with final control over access to court.
Key details and figures
Three numbers stand out in the new framework. First, SARS says the Act was promulgated on 1 April 2026. Second, section 11(4) sets a 10-business-day notice period before most High Court proceedings against the Commissioner. Third, section 95(6), as described in the bill memorandum, gives a taxpayer 40 business days from the date of an estimated assessment, or a longer period prescribed by the Commissioner by public notice, to request a reduced or additional assessment by submitting a true and full return or relevant material.
The penalty changes are also more precise than some headlines suggest. The bill text does not create a blanket free pass for honest mistakes, nor does it support a generic claim that every innocent error is now punishable. Instead, it narrows the structure so that understatement penalties attach where the conduct falls within the statutory behaviour table, while remission for a substantial understatement remains available where the legal test is met. That means the wording of the taxpayer’s conduct, disclosures and supporting professional advice will matter more in disputes.
South African readers should also separate this Act from broader Budget 2026 tax policy. Treasury’s Budget Review said the planned R20 billion tax increase for the 2026 Budget was withdrawn, and that inflation relief would be restored to personal income tax brackets and medical credits. In other words, this new Act is mainly about administration, enforcement, procedure and compliance, not a general increase in the tax burden through higher headline rates.
What happens next
The immediate next step is operational rather than political. Because SARS has now published the promulgation notice, taxpayers, advisers and businesses need to work from the enacted framework when dealing with estimated assessments, suspension requests, inspections, penalty disputes and High Court preparation. The bill memorandum also indicates that some elements will rely on prescribed forms, public notices or guidance, which means SARS administration and practitioner advice will need to catch up quickly.
For Southafriworld readers, the most useful takeaway is simple. This is a real and current legislative change, but it is not best described as a broad new tax hike. The stronger and more accurate story is that Ramaphosa has signed a new SARS administration law that sharpens compliance processes while also spelling out a clearer route for temporary relief when taxpayers move to correct estimated assessments.
