SMMEs for Traders & Travellers Connects Issue 5
A warm welcome to another informative edition of our SMME Traders’ newsletter!
This edition follows the 2025/26 budget speech by Enoch Godongwana, the Minister of Finance, on 21 May 2025. The May 2025 Budget will raise R18Â billion in additional tax in 2025/26 and provide R1Â billion in tax relief in 2026/27. Personal Income Tax brackets and rebates are left unchanged. The fuel levy will increase with inflation, and duty on alcohol and tobacco products increased more than the inflation rate. Primary sectors will receive a diesel refund.
In May 2025, SARS hosted significant meetings of the World Customs Organization (WCO), focusing on strategic reform and regional integration among East and Southern African customs administrations. The meetings reviewed customs administrations’ importance in facilitating trade, mobilising resources, and protecting society. Participants discussed progress in implementing the Trade Facilitation Agreement to lower trade barriers. The WCO is developing inclusive policies that cater to regional needs, aligning its Strategic Plan with member countries’ and regions’ goals to collaborate and modernise. Edward Kieswetter, SARS Commissioner, highlighted the need for coordination and innovation among the 24 countries in the ESA region to pool resources. The conference concluded with elections, appointing South Africa as Vice-Chair of WCO ESA. In this role, South Africa has the responsibility to direct regional strategy, digital transformation, and cooperation.
In the previous publications, we focused on the topic of the Automotive Production Development Programme; SARS Customs Administered Incentives; Authorised Economic Operator programme; and Customs Deferment. These incentives help SMME traders grow their business and comply better.
In this edition, we zoom into another incentive for SMMEs: the special economic zone (SEZ). SEZs seek to boost economic development through tax initiatives. They are a tool to attract foreign investment and build export capacity. Qualifying businesses stand to enjoy tax benefits when they operate in an SEZ. This newsletter explores the key tax incentives associated with SEZs and what they mean for businesses and economies.
- Special Economic Zone (SEZ)
- What’s New?
- SMME Trader Education Initiatives
Background of SEZs
SEZs are geographically designated areas set aside for targeted economic activities. Through tax incentives, these zones attract foreign and domestic investment and technology. The SEZ must be designated by the Minister of Trade and Industry and clients must also apply to SARS Customs for registration and licensing with regards to storage and manufacturing premises.
For more information, go to:Â Special Economic Zones
Types of SEZ
The Minister of Trade and Industry can designate various types of SEZ.
- Industrial Development Zone
A purpose-built industrial estate that uses domestic and foreign fixed direct investment in value-added and export-oriented manufacturing industries and services.
- Free Port
A duty-free area next to a port of entry where imported goods can be unloaded for storage, repackaging or processing, subject to Customs import procedures.
- Free Trade Zone
A duty-free area offering storage and distribution facilities for value-adding activities in the SEZ for export.    Â
- Sector Development Zone
A zone focused on developing an industry through general or specific industrial infrastructure, incentives, and technical and business services primarily for the export market.
For more information, go to:Â The Department of Trade Industry
Tax Benefits of SEZs
Income Tax Exemption
Many SEZs provide exemptions for a specific period. This can significantly reduce the tax burden on businesses, especially for startups and foreign investors.
Customs Duty Exemptions
Goods imported into SEZs often enjoy exemptions from customs duties. This incentivises companies to source raw materials and components at lower costs, enhancing competitiveness.
Consumption-tax Benefits
SEZs often have exemptions or reductions in VAT or goods-and-services tax, making it easier for businesses to manage their tax liabilities while promoting export activities.
Repatriation of Profits
Businesses operating in SEZs are often allowed to send profits back to the company’s country of origin without heavy taxation. This is particularly attractive for foreign investors looking to secure returns on their investments.Â
Capital Investment Incentives
Certain SEZs provide additional incentives on capital investments not available in the surrounding jurisdiction.
Employment Generation
Some jurisdictions offer tax deductions for creating jobs in the SEZ.
For more information, read our Brochure on the Special Economic Zone Tax Incentive
Latest scam alert
Beware of fraudulent activities! Don’t fall for imposters pretending to be Customs Inspectors from SARS. Always verify the authenticity on the Scams & Phishing webpage.Â
How to Register and License an SEZ Enterprise
- To register an SEZ Operator, including as an importer and rebate user:
Apply on form DA 185 (main application form), DA 185.4A11 (Operator), DA 185.4A1 (importer), and DA 185.4A3 (rebate user).
- To apply for designation of the Customs control area:
Apply on form DA 185.4A11.
- To register the Customs-control-area enterprises, including as an importer, exporter, and rebate user:
Apply on form DA 185 (main application form), DA 185.4A1 (importer), DA 185.4A2 (exporter), and DA 185.4A3 (rebate user).
- Licensing of manufacturing warehouses:
Apply on form DA 185 (main application form), and DA 185.4B10 (manufacturing warehouse in the Customs-control area).
- Licensing of storage warehouses:
Apply on form DA 185 (main application form), and DA 185.4B9 (storage warehouse in the Customs-control area).
For more information, go to:Â Registration of SEZ
To locate the relevant registration form visit Find a Form
Effect on Economic Growth
The tax incentives provided by SEZs can attract foreign direct investment while stimulating local economies. By creating jobs, offering training, and boosting exports, SEZs can speed up economic growth. Specific Income Tax, VAT, and Customs benefits/incentives are available.Â
For more information on SEZs in South Africa, click here.
Rebate Provisions
Goods of any kind imported by a registered Customs-controlled-area enterprise into the Customs area can be imported under rebate item 498.01 of Schedule No. 1.
Goods of any kind imported by a registered SEZ Operator to build and maintain the infrastructure of a Customs-controlled area in an SEZ can be imported under rebate item 498.02 of Schedule No. 1. Infrastructure is limited to the basic structural elements permanently installed in a Customs-controlled area, e.g. sanitation, electricity, roads, bridges, and buildings.
Goods can be imported and registered under any rebate item of Schedule 3 by a Customs-controlled-area enterprise (see rule 21A.01 of the Customs and Excise Rules, 1995). The rebate can be claimed if the enterprise complies with:
- Any notes to that item.
- The notes to Schedule No. 3.
- Section 75 of the Customs and Excise Act.
VAT is paid on goods imported by the Customs-controlled-area enterprise under any item in Schedule No. 3. To declare goods and services rendered, you can complete the VAT267 form.
For more information, go to:Â Value-Added Tax
What’s New?
New Features on SARS Online Query System (SOQS) Streamline Compliance for Traders
New features on SOQS create a smoother and more efficient experience for traders using the Registration, Licensing, and Accreditation(RLA) system.
| Improved Features | Benefits |
| Upload RLA-related supporting documentation seamlessly. | Better self-service: traders can easily download their RLA certificates and letters directly from the system. |
| View and download RLA certificates and letters. | Improved communication: messaging between SARS and traders has been made easier and more efficient. |
| Choose to receive these documents by email for added convenience. | Better documentation management: access to RLA documents on the website has been improved, making it simpler for traders to find the information they need. |
For more information read the SARS Online Query System Guide
SMME Trader Education Initiatives
SARS invites you to look out for announcements of our ongoing regional roadshows published on the SARS website.
Webinars: SARS regularly hosts webinars for taxpayers and traders on a variety of topics to provide clarity and certainty on tax obligations. Click here for a list of traders’ and travellers’ webinars.
Webpage: the SARS website has a dedicated Traders and Travellers Education page that provides useful information and updates for Customs & Excise SMME traders and travellers.Â
Digital Channels: to learn how to register on the RLA system, get licensed, and use the RLA eFiling system, click here for self-registration.
For more information on how to register as a trader, you can email [email protected].
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