SA's 2026 Draft Tax Bills: The Comment Period Has Closed: Here's Every Proposal Still Headed for Parliament

Each year, South Africa's Budget announcements are converted into binding legislative text through two companion bills. This split isn't a drafting convenience, it's constitutionally required. Under Section 77 of the Constitution, bills dealing with national taxes, levies, duties, and surcharges are classified as money bills, which follow a specific parliamentary process; the TLAB falls into this category. Tax administration matters — how SARS enforces and administers the law, rather than what the substantive tax rules are, fall instead under Section 75 as an ordinary bill, which is the TALAB's classification. This is why every year produces two separate bills rather than one consolidated tax bill, and it's a distinction genuinely relevant to understanding each bill's parliamentary passage requirements.

National Treasury and SARS jointly published draft versions of both for the 2026 cycle on 30 July 2026, each with a supporting draft memorandum (an Explanatory Memorandum for the TLAB; a Memorandum on the Objects for the TALAB). Both give effect to what was announced in Chapter 4 and Annexure C of the 2026 Budget Review, delivered 25 February 2026, plus technical corrections to existing legislation.

The single most important framing correction for anyone reading Treasury's own announcement today: the statement's final section, headed "Due date for public comments," reads as an open invitation but in fact specifies a firm deadline. Written comments were required to reach National Treasury's tax policy depository (AnnexCProposals@zatreasury.onmicrosoft.com) and SARS (acollins@sars.gov.za) by close of business on 28 August 2026. That date has passed. Neither bill is law, and the formal written-comment channel is now closed.

We traced this process across four prior annual cycles, and the pattern is remarkably consistent:

• 2019: Draft bills published 21 July → National Treasury's Response Document addressing public submissions published 18 September → finalised bills tabled in Parliament 30 October, alongside the MTBPS.

• 2020: Draft bills published 31 July → 112 written submissions received by the 31 August deadline → Treasury and SARS briefed the Standing Committee on Finance 19 August → public hearings with oral submissions held 7 October → bills tabled with the MTBPS.

• 2023: Draft bills published 30 July → Treasury and SARS engaged stakeholders through workshops held 6–8 September → final bills tabled during the MTBPS.

• 2024: Standing Committee on Finance briefed on the draft bills 17 September 2024 → public hearings held 8–9 October 2024 → Draft Response Document presented to the Committee 23 October 2024 → Committee's final report dated 19 November 2024.

1. Living Annuities: Cumulative De Minimis Limit

Currently, a person holding several living annuities with the same insurer or fund could potentially apply the de minimis threshold (the minimum amount below which a living annuity can be commuted for a lump sum rather than continuing as an income stream) separately to each policy. The draft TLAB would make explicit that the de minimis limit must be calculated cumulatively across all living annuities held with the same insurer or fund. Treasury frames this as protecting the underlying policy goal of preserving retirement income, closing what would otherwise function as a loophole allowing artificial fragmentation of annuity holdings to access cash.

2. Donations Tax: Non-Resident Spouse Exemption Limited

South Africa's donations tax currently exempts donations between spouses without reference to either spouse's residency status. The draft TLAB proposes limiting this exemption only to donations made to a spouse who is a South African tax resident. Treasury's stated rationale is specifically anti-avoidance: preventing spouses from deliberately timing or staggering the cessation of their South African tax residence to avoid donations tax and capital gains tax that would otherwise apply. This is a meaningful planning-relevant change for any cross-border or expatriate family with one South African-resident spouse and one non-resident spouse — inter-spousal transfers that were previously exempt regardless of residency would, if this passes as drafted, only remain exempt where the receiving spouse is still SA tax resident.

3. Special Economic Zones: Arm's-Length Pricing Replaces Anti-Profit-Shifting Rule

Companies operating within South African Special Economic Zones (SEZs) can qualify for a preferential 15% corporate income tax rate. The draft TLAB proposes replacing the current anti-profit-shifting rule governing domestic transactions between an SEZ company and a related company outside the SEZ with the standard arm's-length principle — the same transfer-pricing standard generally applied to cross-border related-party transactions. Worth noting for context: SEZ tax benefits generally are already a live area of legislative attention — the prior year's TLAB process saw stakeholders raise concerns about the SEZ benefit's scheduled sunset date (currently set to end in January 2031) and related anti-avoidance measures, with Treasury forming a dedicated task team on broader SEZ issues. This year's transfer-pricing proposal should be read as part of that continuing, broader SEZ policy conversation, not an isolated technical tweak.

4. VAT: Leasehold Improvement Claw-Back Extended to Unregistered Lessors

Under current VAT rules, a claw-back mechanism applies to leasehold improvements in certain circumstances, but a gap exists where the landlord (lessor) is not a VAT-registered vendor. The draft TLAB proposes extending the claw-back mechanism to cover these non-VAT-registered lessors too, through a specific declaration process designed to close this gap. This is a compliance-relevant change for property owners and tenants involved in leasehold improvement arrangements where the landlord falls outside the VAT net.

5. Carbon Budget Compliance Refunds: Timing Mechanics Revised

The current carbon tax refund mechanism references "the immediately preceding tax period," which the draft TLAB proposes deleting for clarity. In its place, refunds for the first two tax periods could be claimed in the third year, and refunds for tax periods three through five could be claimed in the sixth year — a structure Treasury says is also designed to accommodate any technical adjustments needed for the initial two periods. This is relevant specifically to industrial operators subject to South Africa's carbon budget and carbon tax compliance regime.

Excluded From This Draft: Gold Supplied to Banks

Treasury explicitly confirmed that a proposal relating to the "supply of gold to banks," announced in the 2026 Budget Review, is not included in this draft TLAB, stating it requires further consultation and consideration. Businesses in the gold and precious-metals sector expecting this specific change should not assume it forms part of the current legislative track — it has been deliberately held back, with no announced timeline for when, or in what form, it might resurface.

1. Electronic ATA Carnets

The ATA Carnet system — established under the ATA and Istanbul Conventions — allows temporary duty-free admission of certain goods across borders. Carnets have historically been paper-based and manually processed at South African border posts. Following the World Customs Organisation and International Chamber of Commerce's joint electronic ATA Carnet Project, which mandates fully digitised carnets, the draft TALAB proposes an enabling provision allowing South Africa to implement these new electronic requirements. Relevant to any business regularly importing equipment, trade-show goods, or professional equipment under carnet arrangements.

2. Second-Hand Goods: Expanded Documentary Requirements

To address the risk of fraudulent notional input VAT tax claims, the draft TALAB proposes extending documentary requirements for second-hand goods vendors to align with those already prescribed under the Second-Hand Goods Act and its regulations. This tightens the paper trail second-hand goods dealers must maintain to support VAT input claims.

3. Banks Permitted to Screen Refunds Pre- or Post-Deposit

Under current rules, banks must report suspicious tax refunds to SARS and hold them for up to two business days while SARS investigates. The draft TALAB would explicitly permit banks to conduct this screening either before or after the refund is deposited, which Treasury frames as enabling a smoother overall refund process. This is directly relevant to banks' tax-refund handling compliance procedures.

4. Simultaneous Interest Relief With Voluntary Disclosure Applications

Currently, a taxpayer applying for relief under SARS's Voluntary Disclosure Programme (VDP) cannot simultaneously apply for remission of interest on the same disclosed defaults — these have to be handled as separate processes. The draft TALAB proposes allowing VDP applicants to apply for interest remission at the same time as their voluntary disclosure application, streamlining what is otherwise a two-step process for taxpayers trying to regularise their tax affairs.

Who must act, and what specifically changes: No provision in either bill is currently in force, and the public comment window has closed. No immediate compliance action is required or currently available. The practical task now is monitoring, not submitting.

Financial and operational exposure by category: Families with a non-resident spouse should reassess any planned inter-spousal donations or residency-timing strategies in light of the proposed donations tax limitation, since this specifically targets that planning approach. Corporate groups with SEZ and non-SEZ related entities should begin assessing what arm's-length transfer-pricing documentation domestic intercompany transactions would require if the SEZ provision passes as drafted — and should watch for how this interacts with the broader, ongoing SEZ sunset-date and anti-avoidance conversation flagged above. Property owners and tenants with leasehold improvement arrangements involving a non-VAT-registered landlord should track the proposed declaration process closely, since it directly affects their VAT position. Carbon tax-liable operators should model the revised multi-year refund timing against current cash-flow planning.

Realistic timeline: The most important scheduling fact is the one Treasury's own announcement makes easy to miss: this is not an open, ongoing consultation — the written-comment window closed 28 August 2026. Based on four consecutive years of consistent precedent, expect a Standing Committee on Finance briefing, public hearings, a published Response Document, and tabling of the finalised bills alongside the Medium-Term Budget Policy Statement in late October.

What remains uncertain or pending: Whether any of the nine provisions described above will change materially between this draft and the version eventually tabled is an inherent feature of the legislative process the comment and committee stages exist to work through. The gold-to-banks proposal's ultimate fate is likewise open, since Treasury deferred it for further consultation without specifying what that would involve.

Can I still submit comments on the 2026 draft TLAB or TALAB? The formal written-comment window closed on 28 August 2026. If a Standing Committee on Finance public hearing process follows — as it has in every prior year we reviewed — that would be the next realistic opportunity, but no such process has been confirmed as scheduled for 2026 as of this writing.

Are any of these changes currently in effect? No. Both bills remain in draft form. None of the provisions described in this article have legal force yet.

Why are there two separate bills instead of one? It's a constitutional requirement, not a drafting choice. The TLAB is classified as a money bill under Section 77 of the Constitution (dealing with taxes, levies, duties and surcharges), while the TALAB is an ordinary bill under Section 75 (dealing with tax administration) — each follows a different parliamentary process as a result.

When will these bills become law? In each of the past four annual cycles we reviewed (2019, 2020, 2023, 2024), the finalised bills were tabled in Parliament alongside the Medium-Term Budget Policy Statement in late October, following a Standing Committee briefing, public hearings, and a published Response Document.

Which proposed change is most relevant to a typical individual taxpayer? The donations tax exemption limitation for non-resident spouses is likely the most broadly relevant individual-level change, particularly for cross-border or expatriate families. The living annuity de minimis change is relevant specifically to retirees or pre-retirees holding multiple annuity policies with the same provider.

Which proposed change is most relevant to businesses? This depends heavily on sector: the SEZ transfer-pricing change affects corporate groups with SEZ operations; the second-hand goods documentation change affects that specific vendor category; the VAT leasehold claw-back change affects landlords and tenants in improvement arrangements; and the ATA Carnet digitisation affects businesses using temporary duty-free import arrangements.

Why was the gold-to-banks proposal left out of the draft TLAB? Treasury stated it requires further consultation and consideration, without providing further detail on the specific concerns driving that decision or a timeline for when it might be addressed separately.

Where can I read the actual bill text rather than a summary? Both draft bills and their accompanying explanatory memoranda are available on the National Treasury website (www.treasury.gov.za) and the SARS website (www.sars.gov.za).