TAX 2025/26: DRAFT BILLS & REGULATIONS OUT FOR COMMENT

TAX 2025/26: DRAFT BILLS & REGULATIONS OUT FOR COMMENT

• 18 August 2025
• Taxation
• SA Legal Academy

Please note: On 4 September 2025, National Treasury issued a backdated media statement retracting the definition of ‘hybrid equity instrument’ proposed in the draft 2025 Taxation Laws Amendment Bill. According to the statement, ‘numerous commentators’ have raised concerns with National Treasury and the South African Revenue Service that, if adopted, the ‘broad wording’ of the proposals concerned ‘will effectively eliminate preference shares as a viable means of financing’. In addition – although the definition envisaged could eventually be amended during the required pre-tabling and parliamentary public consultationproceses – ‘the uncertainty surrounding the proposal is impacting on current transactions, ... (which could result in) a potential delay in investments’.

As the next step in the process of giving effect to proposals in the 2025/26 Budget, National Treasury has published the following draft Bills and regulations for comment by 12 September 2025:

• draft Taxation Laws Amendment Bill
• draft Tax Administration Laws Amendment Bill
• draft regulatory amendments affecting the domestic reverse charge issued in terms of section 74(2) of the 1991 Value-Added Tax (VAT) Act, and
• draft regulatory amendments prescribing the application of paragraph (d) of the definition of ‘exported’ in section 1(1) read with section 11(1)(a) of the 1991 VAT Act.

This was announced in a media statement released on 18 August 2025 and backdated by two days.

Among other things, the statement draws attention to various key aspects of each piece of proposed new Bill, including:

• provisions in the draft Taxation Laws Amendment Bill intended to:
  • reduce ‘the threshold for ring-fencing … assessed losses’
  • deal with the tax treatment of foreign retirement benefits
  • strengthen anti-avoidance measures by ‘refining the definition of hybrid equity instrument’
  • revise ‘asset-for-share and amalgamation transactions involving collective investment schemes to close loopholes’
  • revise ‘the VAT treatment of airtime vouchers supplied in South Africa for exclusive use in an export country’
  • subject low value imported goods to VAT, and
  • apply a higher tax rate to emissions above associated carbon budgets, and
• provisions in the Tax Administration Laws Amendment Bill intended to:
  • clarify the purpose of an audit certificate issued by a public benefit organisation
  • simplify the customs entry regime for goods imported or exported for express delivery on a door-to-door basis
  • address the ‘dutiability’ of waste derived from processing imported goods in manufacturing plants
  • introduce a customs and excise voluntary disclosure programme
  • enable the VAT modernisation project
  • allow for the inspection of the business premises of a taxpayer applying for registration or approval, and
  • clarify what is meant by a ‘bona fide inadvertent error’ in the context of understatement penalties.

According to the statement, the purpose of draft regulatory amendments on the domestic reverse charge issued in terms of section 74(2) of VAT Act is to ‘resolve practical difficulties’ implicit in the prevailing definitions of ‘residue’ and ‘valuable metal’ – especially in the context of gold-bearing waste.

By broadening the wording of Regulation 8(2)(e)(ii), the second set of draft regulatory amendments will include any terminal operators functioning under a license of the port authority in terms of section 65 of the 2005 National Ports Act.

Once input on these proposed new pieces of legislation has been considered (and, where appropriate, the necessary changes made) the Bills themselves will be tabled in Parliament. There will be further opportunities for public comment during that process.

• media statement
• draft Taxation Laws Amendment Bill
• explanatory memorandum on the draft Bill
• draft Tax Administration Laws Amendment Bill
• memorandum on the draft Bill’s objects
• draft regulatory amendments (valuable metal domestic reverse charge)
• draft regulatory amendments (exports)
• explanatory memorandum

Published by SA Legal Academy Policy Watch

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