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2025 Legal and Policy

Legal and Policy - 3 April 2025

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SARS

  • 27 March 2025 – The Bonds policy has been amended to:
  • Provide clarity on consignor bonds
  • Explain the rule for the correction of surety bonds.
  • Include Rule 12.08.
  • Remove financial institution and bank names.

SC-SE-05 – Bonds – External Policy

  • 27 March 2025 – Customs and Excise Act, 1964
  • 28 March 2025 – Dear Employers, your tax compliance helps SARS to achieve its Higher Purpose, which is to enable the state to provide for the well-being of all South Africans. One of SARS’s strategic objectives is to improve our service to deliver a seamless taxpayer experience that provides clarity and certainty. This letter guides you on how to fulfil your tax obligations during the Employer Annual Declaration period.

See what is new this year, how to submit, more about penalties and more, click here.

The amendments from 1 April 2025 are as follows:

Section 4(1)(b)(i) and (ii):

“(i) where the employee is employed and paid remuneration for at least 160 hours in a month, the amount of R2 500 (previously R2 000) in respect of a month; or

(ii) where the employee is employed and paid remuneration for less than 160 hours in a month, an amount that bears to the amount of R2 500 (previously R2 000) the same ratio as 160 hours bears to the number of hours that the employee was employed for and paid remuneration by that employer in that month.”

Section 6(g):

“(g) receives remuneration in an amount less than R7 500 (previously R6 500) in respect of a month”

Section 7:

The determination of ETI as per section 7 of the ETI Act from 1 April 2025 is as follows:

Monthly remuneration

Formula

First 12 months

Formula

Second 12 months

R0 — R2 499.99

60% of monthly remuneration

30% of monthly remuneration

R2 500 — R5 499.99

R1 500

R750

R5 500 — R7 499.99

R1 500 — (75% x (monthly remuneration — R5 500))

R750 — (37,5% x (monthly remuneration — R5 500))

Note: These amendments will apply for a period of 12 months provided Parliament pass the necessary legislation giving effect to the announcement in the national annual budget within that period of 12 months.

See the Employment Tax Incentive (ETI) webpage for more information.

  • 28 March 2025 – Value-Added Tax Act, 1991
  • VR 009 – Application of the zero rate to the services supplied directly in respect of investments located outside the Republic of South Africa and not listed on a South African Stock Exchange.
  • 28 March 2025 – Mineral and Petroleum Resources Royalty Act 28, 2008
  • 28 March 2025 – Tax Administration Act, 2011

Procedure: Whether the court should go behind the documents discovered by SARS and order it to discover more documents which the applicant contends should be in existence and in the possession of SARS; and whether SARS should be ordered to discover the documents which it has discovered but in a different format as requested by the applicant.

  • Cell C (Pty) Ltd v CSARS (30959/2019) [2025] ZAGPPHC 265 (17 March 2025)
  • Biskit (Pty) Ltd v CSARS (6156/2023) [2025] ZAFSHC 71 (13 March 2025)
  • CSARS v ASPASA NPC and Others (Leave to Appeal) (2023/099811) [2025] ZAGPPHC 223 (5 March 2025)
  • Woods Warehousing (Pty) Ltd v CSARS and Others (2022/026798) [2025] ZAGPPHC 162 (14 February 2025)
  • Naude v CSARS and Another (51712/2017) [2025] ZAGPPHC 152 (13 February 2025)
  • Greyvensteyn and Other v CSARS and Others (B2495/2023) [2025] ZAGPPHC 128 (12 February 2025)
  • FTTX and Energy Warehouse (Pty) Ltd v CSARS (2022/5522) [2025] ZAGPPHC 140 (31 January 2025)
  • Sandbaken Boerdery (Pty) Ltd v CSARS and Another (053180/2022) [2025] ZAGPPHC 54 (21 January 2025)

Summaries are available on the High Court Judgments page

  • 28 March 2025 – Value-Added Tax Act, 1991

Value-Added Tax Act 89 of 1991 (the Act) – vendor conducting enterprise of shaft sinking and mining construction activities – whether input tax on charges for accommodation and food acquired by vendor for specific project employees deductible from output tax – s 17(2)(a)(i)(bb) of the Act – whether accommodation and food acquired for making taxable supplies of entertainment in the ordinary course of vendor’s enterprise – whether supplied to employees for a charge – if so, whether all direct and indirect costs of such entertainment covered.

  • 31 March 2025 – The state provides state warehouses for the safekeeping of goods. These are managed by Customs. The purpose of this list of unentered goods is to notify the importer, exporter and any other person that has interest in the goods that the goods have been taken up into the State warehouse and if they remain unentered they will be disposed in accordance with the provisions of the Customs & Excise Act.

See the latest Customs Weekly List of Unentered Goods here.

Tariff heading 7204.21 needs an ITAC Export permit.

  • 31 March 2025 – South Africa recorded a preliminary trade balance surplus of R20.9 billion in February 2025. This surplus was attributable to exports of R164.0 billion and imports of R143.1 billion, inclusive of trade with Botswana, Eswatini, Lesotho and Namibia (BELN).

See the full Media Release here.

Or visit the Trade Statistics webpage.

  • 31 March 2025 – In this edition, we provide clarity and certainty about Donations Tax and we explore the different options to find out if you owe SARS any money.
  • 31 March 2025 – The South African Revenue Service (SARS) is preparing to implement enhancements to the Tax Directives process as indicated in the IBIR-006 Tax Directives Interface Specification Version 6.803. To access the Tax Directives Interface Specification, visit www.sars.gov.za, go to the “Individuals” page through the top-most menu, and choose “I want to get a tax directive”. We strongly recommend that you review IBIR-006 before proceeding with testing.

This version will resolve the issues encountered in the previous version regarding reason 54 and 48 transfers.

Trade testing began on 24 March 2025 and will run until 7 April 2025.

  • 31 March 2025 – Income Tax Act, 1962
  • 31 March 2025 – Income Tax Act, 1962
  • 31 March 2025 – Income Tax Act, 1962

Multilateral Instrument (MLI) synthesised texts:

  • Croatia
  • Seychelles
  • Tunisa
  • CSARS and Another v Richards Bay Coal Terminal (Pty) Ltd (CCT 10423) [2025] ZACC 3 (31 March 2025)

Customs and Excise Act 91 of 1964 — tariff determination — section 47(9)(e) — wide appeal — review in terms of Promotion of Administrative Justice Act 3 of 2000, section 33 of the Constitution, or alternatively, the principle of legality — rule 53 record — rule 30A application — review jurisdiction — whether taxpayer confined to a wide appeal.

  • United Manganese of Kalahari (Pty) Limited v CSARS and four other cases (CCT 9423; CCT 9823; CCT 6623; CCT 7224; CCT 32023) [2025] ZACC 2 (31 March 2025)

Section 105 of Tax Administration Act 28 of 2011 — test for granting a direction — relevant considerations in granting or
refusing direction — discretionary nature of power to grant direction — production of rule 53 record pending direction

Peremption of appeal — relevant factors in overlooking

  • 31 March 2025 – Customs and Excise Act, 1964

The tariffs amendments notices scheduled for publication in the Government Gazette relate to the following amendments:

With effect from 1 April 2025

  • Part 1 of Schedule No. 1, by the substitution of tariff subheadings 8517.13.10, 8517.14.10, 8517.62.20 and 8517.69.10 to provide for a flat rate of 9% on smartphones with a price greater than R2 500 to give effect to the Budget proposals announced by the Minister of Finance on 12 March 2025
  • Part 2B of Schedule No. 1, by the substitution of tariff items 124.37.05/8517.13.10, 123.37.07/8517.14.10, 124.37.11/8517.62.20 and 124.37.15/8517.69.10 to provide for a flat rate of 9% on smartphones with a price greater than R2 500 to give effect to the Budget proposals announced by the Minister of Finance on 12 March 2025

With effect from 2 April 2025

  • Part 5A of Schedule No. 1, by substitution to Note 8 for an increase of 3c/li in the carbon fuel levy from 11c/li to 14c/li for petrol and from 14c/li to 17c/li for diesel, respectively, to give effect to the Budget proposals announced by the Minister of Finance on 12 March 2025

Publication details will be made available later

  • 1 April 2025 – The South African Revenue Service (SARS) is pleased to announce a positive preliminary revenue-collection outcome for the 2024/25 fiscal year. This achievement takes place in a tough economic environment. SARS is a cornerstone of our cherished democracy. Since its establishment, it has collected more than R23.3 trillion to help build a capable state that caters for all. This success is inextricably linked to an efficient and effective revenue administration that discharges its legal mandate to collect all revenue due to the fiscus, foster compliance and facilitate legitimate trade. As an organisation, everything we do, is about the transformational impact we have on the lives of people, which we call our “Higher Purpose”. We are on the road to reimage our organisation into a smart, modern SARS that can be trusted and admired by all, as encapsulated in our Vision 2025–2030.

By the end of March 2025, SARS had collected a record gross amount of R2.303 trillion, representing year-on-year growth of 6.9% against estimated nominal GDP growth of 5.4% (2024/2025). In this difficult economic environment, SARS paid refunds of R447.7 billion to taxpayers, the highest-ever amount in refunds (versus R413.9 billion in the prior year), representing growth of 8.2%. This brings the collected net amount to R1.855 trillion, which is almost R8.8 billion higher than the revised estimate, and R114.0 billion more than last year’s R1.741 trillion. “I am pleased that the R447.7 billion returned into the hands of taxpayers is good for the economy”, said Commissioner Kieswetter. “I, however, remain deeply concerned about the ever-present threat of refund fraud and abuse of the system”. To illustrate this problem, in the period under review, SARS prevented the outflow of R146.7billion of impermissible refunds.

The preliminary revenue collection represents a substantial tax-to-GDP ratio of 24.8%, reflecting the country’s fiscal health and efficiency in revenue generation. Moreover, the tax-buoyancy ratio for the fiscal year 2024/25 was estimated at 1.20, indicating the robust response of tax revenue relative to economic growth. This buoyancy ratio underscores the government’s capacity to adapt its revenue-collection strategies to the dynamic economic environment, ensuring sustained fiscal stability and growth. In the fiscal year 2024/25, the performance of key taxes has been a critical indicator of economic stability as South Africa navigates the complexity of post-pandemic recovery. There has been a notable shift in revenue streams, influenced by a combination of market dynamics, trade patterns, and consumer behaviour. This has resulted in shifts in the outlook for some of the key indicators that underpinned revenue performance. For example, nominal GDP was expected to grow at 5.7% at Budget 2024 and adjusted to 6.1% midway through 2024/25. At Budget 2025, the outlook had been reduced to 5.4%. The growth of some indicators, such as the wage bill, final household expenditure, imports, and exports were forecasted to fall during the year, whereas the estimates for gross operating surplus improved.

South Africa demonstrated uneven economic recovery, exhibiting both positive advancements and enduring difficulties. The Finance, Community, Wholesale, and Construction sectors had robust gains, contributing to the 6.1% year-on-year growth in revenue collections (2024/25) and 4.4% in GDP (2025). Below is the performance of the respective taxes.

Net Personal Income Tax (PIT) Including Interest

Net PIT (including interest) was estimated to grow at 13.8% at Budget 2024; 12.3% at MTBPS; and 12.9% at Budget 2025. Net PIT grew by R81.8 billion (12.6%), which could be partly attributed to above-inflation growth in the Finance and Community sectors’ pay-as-you-earn (PAYE), as well as the gains from Two-Pot withdrawals. The Two-Pot directives were valued at R12.9 billion for the year-to-date, compared to the projected estimate of R5.0 billion (R7.9 billion more). Furthermore, there has been a noticeable improvement in PAYE tax compliance, as indicated by the Voluntary Compliance Index, which rose by 0.38 percentage points from the previous year’s 75.10% (2024/25) to 75.48%. This uptick in compliance efforts is shaping taxpayer behaviour.

Net Company Income Tax (CIT) Including Interest

The assumption for Net CIT (including interest) was -3.3% at Budget 2024; 0.4% at MTBPS; and 1.1% at Budget 2025. Net CIT grew by R6.5 billion (2.1%), driven by CIT Provisional Tax collections of R323.3 billion, which were R10.5 billion (3.3%) higher than in the prior year, and exceeded the Budget 2025 estimate by (R4.3 billion, 1.4%). The growth was mainly due to the Finance sector, which was buoyed by improved profits, whereas the Mining sector continued to contract. The CIT Voluntary Compliance Index rose by 3.2 percentage points from the previous year’s 48.43% (2024/25) to 51.66% (February 2025), with notable improvements in filing compliance.

Net Value-Added Tax (VAT)

Net VAT, which contributed 24.7% of total collections, grew by R10.5 billion (2.3%).

The assumption for VAT refunds was growth of 7.6% at Budget 2024; 6.7% at MTBPS; and 7.2% at Budget 2025. At the end of March 2025, VAT Refunds amounting to R365.5 billion were disbursed, with year-on-year growth of R22.5 billion (6.6%). The top three refunded sectors were Mining (mainly owing to higher exports and local expenses), Finance, and Manufacturing. Preliminary indications are that SARS’s efforts avoided leakage worth R74.0 billion (R60.7 billion avoided in 2023/24), predominantly thanks to syndicated-crimes investigation, investigative audit, and tax verifications. Total VAT refunds this year of R365.5 billion represent about 4.9% of GDP. It is pleasing that of all the refunds, R127.4 billion were directed to SMMEs, which are pivotal in driving job creation. The assumption for Domestic VAT was growth of 6.4% at Budget 2024; 7.1% at MTBPS; and 7.3% at Budget 2025. Domestic VAT collections amounted to R562.1 billion, growing by R36.6 billion (7.0%). Of this, R271.0 billion (48.2%) of the Domestic VAT was paid by large business vendors, and R292.1 billion (51.8%) by “non-large” business vendors, predominately from the Finance sector. This growth can be attributed to factors including improved consumer sentiment, lower interest rates, contained inflation, and early pension-fund withdrawals, all of which have bolstered household consumption in the last quarter of 2024. Furthermore, an additional R9.8 billion was collected as cash from SARS Compliance Revenue efforts. The VAT Voluntary Compliance Index rose by 1.8 percentage points from the previous year’s 63.78% (2024/25) to 65.58%, signalling positive shifts in the in-year compliance trends.

The assumption for nominal imports was growth of 6.0% at Budget 2024; 3.8% at MTBPS 2024; and 1.5% at Budget 2025. The assumption for Import VAT was growth of 8.2% at Budget 2024; 0.7% at MTBPS; and -0.5% at Budget 2025. Actual imports had contracted by -3.3% by 31 March 2025, resulting in lower-than-assumed Import VAT of R2.30 billion as measured against the Budget 2025 estimate. Import VAT collections contracted because of fewer imports of electrical machinery as well as vehicles, parts, and machinery.

SARS believes that taxpayers are honest and want to be helped to meet their obligation. In this respect, SARS makes it easy and simple for taxpayers to transact with the organisation by proving clarity and certainty. However, when taxpayers wilfully abdicate their legal obligation, SARS makes it hard and costly for them. SARS is taking advantage of technology such as data science, artificial intelligence, and machine-learning algorithms to counter criminality and wilful non-compliance. These systems also ensure that no legitimate refunds are denied, while preventing impermissible and fraudulent refunds. The SARS Compliance Programme interventions generated R301.5 billion in compliance revenue, marking a 15.8% year-on-year increase. A portion of this revenue could be attributed to cash-collection initiatives, amounting to R154.8 billion. Strategies to prevent revenue leakage contributed another R146.7 billion. Efforts and outcomes from SARS’s administrative activities included:

    • R94 billion from resolving over 3.7 million outstanding debt cases – supported by debt propensity ML models
    • R103 billion from tax verifications where the risks were flagged through our AI driven risk profiling models powered with Big Data, debt equalisation and refund fraud risk management ML models – executing 1.7 million verifications cases
    • R59 billion from executing 230 000 tax and customs compliance audits
    • R30 billion from syndicated crime – conducting 198 complex investigations (made up of 165 Illicit, 33 State Capture)
    • R15 billion from general compliance work – 870 000 compliance follow up
    • 20 million service-related interactions at our branches, via the phone or through our digital self-service platforms assisting taxpayers and traders to comply.

The broad rise in revenue can be attributed to enhanced strategies and the diligent implementation of compliance measures. Revenue growth demonstrates the efficacy of targeted efforts to optimise fiscal outcomes. Such results underscore the importance of refining compliance operations to deliver sustainable financial growth and accountability. This remarkable achievement underscores SARS’s commitment to rigorous compliance and our ability to drive revenue-collection growth through strategic interventions. As mentioned in the Budget 2025, the ongoing research to refine the estimation of SARS’s tax gap is showing promising progress, reflecting a dedicated effort to enhance fiscal transparency and efficiency. In 2023, the completion of the VAT Tax Gap Study was a milestone that set the stage for the current focus on CIT and PIT tax-gap studies, which have been under way since 2024. The Minister of Finance, Enoch Godongwana, has allocated SARS an additional R7.5 billion over the MTEF period. SARS intends in the short to medium term to use this allocation to reduce its debt cash collection and pursue the more than 5 million outstanding returns. Equally important, SARS will continue to strengthen its efforts to deal firmly with the illicit economy, trade-based money laundering and illicit financial flows including illicit cigarettes, second-hand gold, crypto currency, trade mispricing and undervaluation fraud amongst others. Over the same period, SARS will also expand the modernisation of its systems in both tax and customs.

As we reimagine the organisation, we envisage a future state when tax transaction is seamless and just happens. This is an experience witnessed by nearly 5 million taxpayers who benefited from Auto Assessment last year, in which taxpayers did not have to do anything: by harnessing third-party data, SARS reconciled their tax affairs. Even though taxpayers retained the right to provide SARS with additional information the organisation did not have, the uptake of Auto Assessment was more than 98%, with those who made actual changes representing less than 1% of Auto-Assessed taxpayers. Those who were due refunds received them in 72 hours. Taxpayers who opted to file their returns received an outcome in five seconds. We are also pleased that taxpayer service has increased by 5.8% from last year to 87.13%. This is indeed a story of HOPE. SARS is making steady progress in its strategic intent to build a tax and customs system that is based on voluntary compliance, while enhancing its capability to detect, deter, and make wilful non-compliance hard and costly. To exercise sovereignty over the destiny of our country, we must broaden our tax base and continue to encourage fiscal citizenship, while connecting people, data, and technology to deliver our mandate. As we step into the 2025/26 fiscal year, our primary goal is strategically to harness the components of our balance sheet. SARS will continue to deepen its work with and through all stakeholders in the tax ecosystem to engender trust in the organisation.

The success of SARS is integral to the success of whole of government. Several legacy projects if implemented will anchor and sustain the whole of government approach and strengthen the National Financial System​. While the mandate of each government entities will be respected, we collaborate on several projects amongst other, a unique digital identity for individuals and entities, common portal ensuring data integrity segregation based on mandates of agencies. ​ We will also look at a common payment platform with e-invoicing​ and this will reduce the volume of cash in the system​ as well as a common disbursement platform to replace the disparate payment platforms. SARS, subject to funding and appropriate support is ready to lead these initiatives since they are critical to our and other government departments success. We are equally pleased that SARS employees through an employee engagement survey demonstrates a steady and remarkable improvement year on year. In the year 2024/2025, it stands at 71% from 69% in 2023/2024, moving from 61% in 2019/2020. This positive development communicates a clear message that every year our employees are committed to serve our country with steadfast determination and pride. The Minister has set for SARS revenue estimate of R2.006 trillion for the 2025/26. This conveys confidence by the Minister on SARS’s ability to meet this challenge. We will spare no efforts in rising to this challenge. “In the build-up to the momentous occasion of this revenue announcement, I made a clarion call to action to the whole SARS family regardless of whether they were in core operations, enabling, or support functions”, said Commissioner Kieswetter. “I must proudly state that they all responded resoundingly. They all went out and made calls and looked for the inches that contributed to this glorious result. I am deeply indebted to all my colleagues for rising to the challenge”. Their commitment to serve South Africans is self-evident.

“I also express my heartfelt thanks to all South Africans, especially compliant taxpayers and traders, for unfailingly meeting your legal obligations. We are forever working hard to make your experience with SARS easy and seamless — where the best service is no service at all”, he concluded.

For further information, please contact SARSMedia@sars.gov.za.

  • 2 April 2025 – Value-Added Tax Act, 1991: In response to the recent regulations promulgated on 14 March 2025, two publications relating to Frequently Asked Questions have been published, to assist vendors who may have any questions:
  • Frequently Asked Questions – Domestic Reverse Charge Regulations
  • Frequently Asked Questions – Supplies of Electronic Services

NATIONAL TREASURY

SAFLII

OECD

OTO

Author3 April 2025
DivisionLegal and Policy
Keywords
Legal and Policy
3 April 2025
Categories
Legal and Policy
Date3 April 2025