SARS changing the rules for non-compliant taxpayers in South Africa

SARS has published draft rules that will make it easier for non-compliant taxpayers to regularise past customs and excise defaults.

The South African Revenue Service (SARS) has published draft rules outlining how businesses and individuals can apply for Customs and Excise Voluntary Disclosure Relief (VDR).

The draft rules – which were published for public comment on 4 August 2026, with comments due by 25 August – provide greater certainty about how the process will work in practice.

The proposed framework follows the introduction of Chapter XB into the Customs and Excise Act in late 2024, which created South Africa’s first formal voluntary disclosure system for customs and excise matters.

The regime allows taxpayers to voluntarily disclose past customs and excise non-compliance and, if they meet the legal requirements, regularise their affairs.

According to Tax Consulting SA’s head of tax controversy and dispute resolution, André Daniels, the draft rules do not change who qualifies for relief but explain how the application process will work.

“The success of Customs and Excise VDR depends not only upon the relief available under the legislation itself, but equally upon clear, practical and predictable procedures through which that relief may be accessed,” he said.

The proposed rules explain how applications must be submitted, what information applicants must provide and what supporting documents are required.

They also set out the format for voluntary disclosure agreements and explain how SARS will handle applications that require additional information before a decision can be made.

Daniels said this should make the process more predictable for taxpayers who want to correct historical mistakes. “Clear procedural requirements reduce uncertainty regarding what SARS expects from applicants.”

It also improves consistency in application preparation and should contribute to more efficient administration of the VDR process.

Rule changes for taxpayers

One of the most significant proposals relates to businesses that should have been registered or licensed under the Customs and Excise Act but failed to do so.

Under the draft rules, these taxpayers would first need to register or obtain the necessary licence, Daniels explained.

If they submit a voluntary disclosure application within 21 working days of receiving that registration or licence, the disclosure will still be treated as voluntary. This removes an important obstacle.

“Absent such a provision, taxpayers could potentially have found themselves in the difficult position of first having to regularise their registration status before becoming eligible to seek voluntary disclosure relief.”

Another proposal allows taxpayers to ask SARS anonymously whether they are likely to qualify for voluntary disclosure relief before revealing their identity.

These opinions would not be binding. However, Daniels noted that they could encourage more taxpayers to come forward.

“Allowing taxpayers to obtain a non-binding indication of eligibility before formally identifying themselves should encourage earlier engagement with the VDR process,” he said.

The draft rules also provide detailed guidance on the documents required for different types of applications, including those involving bills of entry, rebates, refunds and other customs or excise underpayments.

Where a case depends on tariff, valuation, or origin determinations, SARS can pause the voluntary disclosure process until those issues are resolved.

At the same time, the rules are designed to prevent taxpayers from using these determinations simply to delay the finalisation of their applications.

Daniels made it clear that the proposed rules do not expand the relief available to taxpayers under the Customs and Excise Act.

Taxpayers will still need to meet all the legal requirements before relief can be granted. Instead, the main benefit is that the rules provide certainty about how the system will operate.

If adopted substantially in their current form, the proposed rules should enhance procedural certainty, encourage greater utilisation of the Customs and Excise VDR regime, Daniels said.

They would also further support the objective of promoting voluntary compliance within South Africa’s customs and excise system.