With filing season for individual taxpayers (excluding auto-assessed taxpayers) opening on 13 July 2026, SARS, in an effort to enhance voluntary compliance, has released its “Guide on Income Tax and the Individual (2025/26) on 15 June 2026.

Although not an “official publication” as defined in section 1 of the Tax Administration Act, 28 of 2011, the guide serves to clearly inform taxpayers of both their income tax commitments, and the hefty consequences of failing to meet those obligations, including Understatement Penalties of up to 200% and criminal sanctions!

Included in the guide are “need to know” items, such as when an individual is not required to submit an income tax return, and SARS’ ability to use readily available third-party data to conduct an auto-assessment.

Know Your Tax Return Filing Obligations

Personal income tax is payable to SARS and calculated based on the total taxable income earned by an individual for the full year of assessment (01 March to 28/9 February of the following year).

Where there is less certainty, is when a South African individual taxpayer may be auto-assessed, and more so, when individuals are required to submit an income tax return.

Per the guide, some examples of when an individual must submit a tax return for the 2026 year of assessment, are:

• Receiving gross income from employment, from more than one employer, and which exceeds the tax threshold.
• Remuneration has been received or accrued to that person, in respect of services rendered outside of South Africa.
• Is a South African tax resident with a capital gain or loss exceeding R40,000.
• The individual was granted a taxable benefit in the form of a right of use, of a motor vehicle, and/or receives any taxable allowance, and whose gross income exceeds the applicable tax threshold.
• SARS issues an income tax return or requests an individual to furnish an income tax return, regardless of the amount of income received or accrued.

The guide goes further, setting out requirements for the accuracy of information disclosed in the tax return submission process, but more importantly, the sanctions taxpayers may face when they falter.

Criminality of Non-Compliance

Taking it from the ground up, there are some basics you need to know to stay on the right side in SARS’ War on Non-Compliance and the guide clearly illustrates some examples of “criminal behaviour”, as contained in section 234 of the Tax Administration Act, provides a laundry list of actions and inactions, which constitute criminal offences.

This list includes acts committed based on an absence of tax literacy, such as retaining specific documentary items or issuing an incomplete document to SARS. On the flip side, failure to commit acts, such as the submission of a tax return, or notifying SARS of a change in registered particulars, may also result in criminal charges being laid against you.

Whilst the listed offences range from the obvious, such as pretending to be a SARS official, to the seemingly unassuming such as submitting erroneous statements to SARS, they all carry a liability, upon conviction, of a fine, or a maximum prison sentence of 2 years.

With the punishment fitting the crime, criminal offences relating to “tax evasion”, as contained section 235 of the Tax Administration Act, carry a liability, upon conviction, of a fine, or a maximum prison sentence of 5 years – this includes making false statements on a tax return with the intention of evading tax or obtaining an undue refund.

Penalising a Lack of Punctuality

As a starting point, tax return filing obligations must be met, as we all know. Where there is a failure to meet the filing season deadline, SARS will have no patience for late submission, and the monthly levying of administrative penalties will commence. These recurring penalties may go up to R16,000 per outstanding tax return, per month outstanding.

Whilst this may not sound like a heavy price to pay for your non-compliance, the monthly administrative penalties can quickly rack-up, where multiple returns are outstanding for an extended period of time. Practically, we have seen this climb, per below excerpt:

Over time this can snow-ball your original tax liability, to double, or even triple the amount being owed to the revenue authority; you are liable for the full amount!

Avoid Penalties, and Prosecution

Where you find yourself on the wrong side of the tax laws, it is imperative to ensure a timeous response or tax return submission to SARS, with all correct supporting documentation. If you fail at this first hurdle, and you have made an incorrect disclosure to SARS, you will feel the walls closing in when those Estimate / Additional Assessments are raised, or Final Demands received for overdue tax debts. 

The nail in the coffin is always the Understatement Penalties, capping at a bank-breaking 200% of the capital taxes due!

As a rule of thumb, once the penalties start rolling in, any and all correspondence received from SARS should be holistically addressed by a by a strong multi-faceted tax, legal, and financial team. In instances of non-compliance with tax laws, legal professional privilege is a must, especially where SARS have suspicion of, or have already detected current/historic non-compliance, or “risk(s)”. 

This will not only serve in safeguarding you against some hard-time, but also allow for the correct legal steps to be taken, preventing SARS from implementing aggressive collection measures.

Written by Jashwin Baijoo, Partner and Head of Strategic Engagement & Compliance at Tax Consulting SA