SMMEs for Taxpayers Connect Issue 13 - February 2026
Small, Medium, and Micro Enterprises (SMMEs) are vital to South Africa’s economy. They account for approximately 34% of South Africa’s GDP and employ 60% of the workforce. In November 2025, SARS collaborated with stakeholders nationwide for Global Entrepreneurship Month under the theme, “Together We Build”. The initiative celebrated entrepreneurship’s role in economic growth and job creation, emphasising tax compliance for sustainable businesses and communities.
SARS is committed to work with and through stakeholders to improve the tax ecosystem. SARS is present at SMME events such as Vodacom TechDay of Tourism; Eskom Business Connect; Services SETA Webinar Series; Department of Tourism & City of Ekurhuleni Compliance & Resilience Workshop; DTIC Global Entrepreneurship Week workshops; and the Proudly SA Webinar empowering emerging farmers.
For 2025/26, the Ministry of Finance’s revenue estimate set for SARS was revised during the Medium-Term Budget from R1 985.6 billion to R2 005.3 billion. Of this target, 28,56% is expected to come from SMMEs. The SARS Commissioner stressed that meeting this goal will benefit South Africans.
Our role extends beyond revenue collection; we advance national fiscal goals in the face of persistent challenge such as debt, unemployment, and inequality. With government depending on tax revenues for around 90% of expenditures, strong domestic resource mobilisation is essential to safeguard fiscal integrity and reduce reliance on external funding.
With two months left in the 2025 fiscal year, we remind all SMMEs to submit outstanding returns, pay any tax due, and use available incentives.
Turnover Tax
Corporate Income Tax -Annual Tax Return Submission Reminder
Provisional Tax
Easily Update Contact Details on eFiling
Supply of Electronic Services by Foreign Suppliers/Intermediaries
VAT and PAYE Registrations: Biometric Verification
Turnover Tax
SARS encourages qualifying businesses to register for Turnover Tax, a system that simplifies tax compliance for small enterprises with annual turnovers not exceeding R1 million. To benefit from Turnover Tax, businesses must observe the registration deadlines, paying special attention to the 28 February cut-off.
With Turnover Tax, SARS levies tax on a taxpayer’s turnover rather than profit. The applicable tax rate for taxable turnover ranges from 0% to 3%. Small businesses interested in registration can check if they qualify first and then can download and complete the Turnover Tax application form (TT01).
Business owners can use any of the three channels below to submit the Turnover Tax registration:
- SARS Online Query System (SOQS)
- The branch-service walk-in option. Make an eBooking appointment on the SARS website to submit your TT01 registration at a SARS branch.
- Print the TT01 form from the Turnover Tax webpage, complete it, and submit the registration request through the email addresses below:
- Taxpayers: [email protected]
- Tax Practitioners: [email protected]
Register before the beginning of a year of assessment, which is 1 March, or within two months from the date of the start of business activities.
Submit Turnover Tax returns and pay tax every year from 1 July to 31 January of the following year. Turnover Tax requires three payments:
- First payment/return: 31 August on the TT02 — Payment Advice for Turnover Tax.
- Second payment/return: 28 February on the TT02 and TT03.
- Final payment is due after the annual TT03 return has been submitted and processed.
For more information, visit the Turnover Tax webpage, and read the Turnover Tax Guide and Turnover Tax Leaflet.
Corporate Income Tax -Annual Tax Return Submission Reminder
We wish to remind all companies and juristic persons of their obligation to submit an annual tax return for the year of assessment. This applies to entities that meet any of the following criteria:
- Made earnings exceeding R1 000 during the assessment year.
- Held assets with a cost value greater than R1 000 or had liabilities exceeding R1 000 at any point during the assessment year.
- Achieved a capital gain or incurred a capital loss of more than R1 000 through the disposal of assets subject to the Eighth Schedule of the Income Tax Act.
- Reported taxable income, taxable turnover, an assessed loss, or an assessed capital loss.
If your company or organisation falls within any of these categories, it is required to submit a tax return for the relevant assessment period. Compliance with these filing requirements ensures adherence to SARS regulations and helps avoid any potential penalties.
For more information read the guide on completion of an ITR14.
Provisional Tax
Provisional Tax is an advance payment toward your annual Income Tax liability, not a separate tax.
A provisional taxpayer is:
- A company
- Someone notified by the SARS Commissioner
- Anyone (other than a company) earning non-remuneration income, allowances, or advances as defined in section 8(1), or remuneration from an employer not registered or employees’ tax
- A labour broker with an exemption certificate under paragraph 2(5)(a)
For more information read the guide to Provisional Tax.
Easily Update Contact Details on eFiling
Taxpayers are encouraged to update their security contact details using the link available on the SARS website homepage. When a request is made to update these details from the pre-login option, the facial biometric authentication feature is activated to verify the user’s identity. This ensures that updates are securely authorised and applied to the correct eFiler. In addition, this new quick link will help taxpayers who have challenges with receiving an OTP.
For more information, go to: Maintain personal details on eFiling vs Branch.
Supply of Electronic Services by Foreign Suppliers/Intermediaries
The newly developed “Supply of Electronic Services by Foreign Suppliers and Foreign Intermediaries” external guide has been updated to align with the legislative amendments.
As part of the update:
- Section 23(2)(a) and section 46(2) of the Value-Added Tax Act were amended, effective from 24 December 2024, to allow for the appointment of a natural person who is a non-resident of the Republic as a representative vendor for a Foreign Supplier of Electronic Services or Foreign Intermediary.
- A new proviso has been added to section 23(2) of the VAT Act stipulating that a foreign enterprise will not be required to open a South African (SA) bank account, provided that the enterprise resides in countries that have a Double Taxation Agreement with SA in terms of section 108(2) of the Income Tax Act or section 75(2) of the VAT Act. However, section 23(2)(b) of the VAT Act shall not apply in the following circumstances:
- If a company is an “external company” defined in section 1 of the Companies Act (2008), and it does not have a fixed or permanent place of business in SA;
- If a natural person is physically present in SA for a period less than an accumulated period of six months in any period of 12 months;
- If the person is defined as an “enterprise” in terms of paragraph (b)(vi) of section 1 of the VAT Act.
- Furthermore, where the non-resident of SA no longer complies with the requirements of the provision to section 23(2B) of the VAT Act, normal rules for the representative vendor and banking details must apply with effect from the date of such non-compliance, where such date is after 24 December 2024.
- The definition of “electronic services” was amended in section 1(1) of the VAT Act to include electronic agent, electronic communication, or internet.
- A new definition of “content” was added to section 1(1) of the VAT Act.
- The updates also highlight that a credit for a Foreign Supplier of Electronic Services will not be refunded; it is offset against future VAT liabilities. However, where a Foreign Supplier of Electronic Services is deregistering for VAT in SA, any credit will be refunded to the foreign bank account of that Foreign Supplier of Electronic Services.
For more information, go to: VAT-REG-02-G02-Foreign-Suppliers-of-Electronic-Services-External-Guide.pdf
Set yourself reminders for the 28th of February 2026 to avoid last-minute rushes and stay compliant!
- Turnover Tax Applications Deadline – All applications must be submitted.
- Provisional Tax second payment/return due – Ensure your second payment or return is submitted.
- Corporate Income Tax Returns closing date for February year end SMMEs
VAT and PAYE Registrations: Biometric Verification
In November 2024, SARS introduced biometric facial recognition for all new eFiling registrations on both the SARS MobiApp and the web. Biometric verification has improved:
- Compliance levels.
- Ease and fairness of doing business with SARS.
- Public trust and credibility.
- Information technology and communication between SARS and taxpayers.
- Taxpayer service and experience.
Taxpayers and registered representatives must verify their identity via biometric authentication on a camera-enabled device. If biometric authentication fails, depending on the tax type being registered for (VAT or PAYE), a request to submit supporting documents will be sent.
For more information, go to: How to register for PAYE on eFiling.
Need Help?
- The SARS YouTube channel – watch our helpful tutorial video on the SARS YouTube channel giving detailed guidance on how to file.
- If you have no other choice but to visit a SARS branch, you must book your appointment online before your visit.
Useful Links
- Reduced Tax Rate for Small Business Corporations – small businesses with an annual turnover of up to R20 million may qualify to pay Income Tax at a reduced rate. Click here for a guide that will help you make the right decision and see the qualifying criteria.
- Employment Tax Incentive – incentivises employers to hire young job seekers. Click here to see the qualifying criteria.
