On 16 August 2025, National Treasury and SARS released the 2025 Draft Taxation Laws Amendment Bill (TLAB), Draft Tax Administration Laws Amendment Bill (TALAB), and revised VAT regulations for public comment. These proposals give effect to tax measures announced in the 2025 Budget Review and the May 2025 Budget Overview.
Key proposals in the Draft TLAB include:
- Corporate reorganisation rules — Removal of certain asset-for-share and amalgamation exemptions to limit tax avoidance by collective investment schemes.
- Foreign retirement funds — Removal of current exemptions, making benefits taxable in South Africa based on residence (subject to double tax treaties).
- Assessed losses — Stricter ring-fencing rules to curb misuse by non-commercial activities.
- Hybrid equity instruments — Clarification that instruments classified as debt under IFRS will also be treated as debt for tax purposes.
- VAT treatment — Removal of the tax-free threshold for low-value imports, clarification of VAT on vouchers, and adjustments to export zero-rating.
- Carbon tax (Phase 2) — Extension of energy efficiency incentives, retention of electricity neutrality until 2030, increased offset allowance, and higher rates for emissions above carbon budgets.
Key proposals in the Draft TALAB include:
- Express deliveries — Simplified customs entry introduced for parcels under R500.
- Manufacturing waste and scrap — New duty rebates allowed under specified conditions.
- Customs compliance — Introduction of a voluntary disclosure programme for customs and excise.
- Registration processes — Broader inspection powers granted to SARS at application stage.
- Penalty framework — Clearer definition of bona fide inadvertent errors for understatement penalties.
- Reverse charge regime — Revised definitions of “residue” and “valuable metal” to improve implementation.
Written comments must be submitted by 12 September 2025 to both. Businesses and tax practitioners should review the proposed changes promptly to assess potential compliance impacts and prepare submissions. Should you require professional advice in this regard do not hesitate to contact our offices.
