Tax Practitioner Connect Issue 69 (February 2026)

Issue 69 - February 2026

This month we provide guidance on tax practitioner deregistration procedures and dispute reviews under the Tax Administration Act, alongside important updates to the Income Tax Act, including revised tables of interest rates on taxes and refunds, and resources such as Interpretation Note 143 for political party income tax exemption and the Turnover Tax Guide for micro businesses. We also highlight key announcements from the 2026 Budget Speech, which introduce significant tax relief for small and micro businesses, notably the increase in the compulsory VAT registration threshold and the turnover tax qualifying threshold from R1 million to R2.3 million, aimed at reducing compliance burdens, supporting business growth, and simplifying tax administration.

2026 Budget sees increases in VAT Registration Threshold and Turnover Tax Qualifying Threshold
Request for Review of Tax Practitioner Deregistration
Interpretation Note 143 – Income Tax Exemption: Registered Political Party
Tax Exempt Institutions Registration Going Live on 2 March 2026
Final Warning to Trusts

2026 Budget sees increases in VAT Registration Threshold and Turnover Tax Qualifying Threshold

In the 2026 Budget Speech, the Minister of Finance, Enoch Godongwana, announced that the compulsory VAT registration threshold will increase from R1 million to R2.3 million in annual taxable turnover, marking the first adjustment since 2009. The increase is intended to reduce the administrative and compliance burden on small and medium-sized enterprises, remove a long‑standing disincentive to business growth, and better align the threshold with inflation and current economic conditions, thereby supporting entrepreneurship and simplifying tax compliance for smaller businesses.

The Minister also announced that the turnover tax qualifying threshold for micro businesses will increase from R1 million to R2.3 million in annual turnover, representing the first major adjustment since the regime was introduced. The increase is intended to reduce compliance and administrative burdens, allow micro businesses to remain in the simplified turnover tax system for longer, and provide greater room for growth before transitioning to the standard income tax system, thereby supporting entrepreneurship and improving cash flow for small businesses.

For more information, go to: Value-Added Tax and Budget

Request for Review of Tax Practitioner Deregistration

Registered Tax Practitioners must adhere to their professional regulations to maintain their registration status. Section 240(3) of the Tax Administration Act No.28 of 2011(hereafter referred to as ‘the Act’) outlines the conditions under which a Tax Practitioner can be deregistered. If a Tax Practitioner has been deregistered and wants to dispute this, they can request a review by sending an email to [email protected]. Reasons for the request together with supporting documents must accompany the request. The SARS Tax Practitioner Governance Committee will review this request and provide a final decision to the deregistered individual.

For more information, go to: Reporting the unprofessional conduct of a Tax Practitioner (Section 241)

Tables of Interest Rates

The Income Tax Act, 1962 has been updated. The updates can be accessed at: Tables of Interest Rates

Table 1 – Interest rates on outstanding taxes and interest rates payable on certain refunds of tax
Table 2 – Interest rates payable on credit amounts

Interpretation Note 143 – Income Tax Exemption: Registered Political Party

This note provides guidance on the interpretation and application of the exemption from income tax under section 10(1) (cE) of the receipts and accruals of any political party registered under section 15 of the Electoral Commission Act. Access the information here: Interpretation Note 143. See also the Tax Exemption Institution page on the SARS website.

Tax Exempt Institutions Registration Going Live on 2 March 2026

SARS is introducing an online registration system for Income Tax Exempt Institutions (TEI). This digital system aligns with SARS’s strategic objective to simplify taxpayer compliance through digital platforms. It includes the migration and data take-on of all existing records and trade testing and will ensure an improved taxpayer experience. Access the Tax Exempt Institutions Connect Issue 11 (March 2026) and Special edition: Tax Exempt Institutions and Tax Practitioners Connect – March 2026.

Final Warning to Trusts

To increase compliance levels of trusts, SARS has issued final demand letters to trusts who did not submit an annual tax return for the 2024 and 2025 years of assessment. In terms of section 210(2) of the Tax Administration Act, SARS will shortly issue the related public notice for the imposition of administrative non-compliance penalties for trusts. See our Trusts webpage for more information.