Diesel Refund Increased to 100% for Onland Primary Sector Users

This article will count 0.25 units (15 minutes) of unverifiable CPD. Remember to log these units under your membership profile.

SARS issued a letter to stakeholders stating that from 1 April 2026, for businesses operating in the farming, forestry and mining sectors that use diesel in qualifying activities conducted onland will be entitled to claim a diesel refund on 100% of eligible diesel used in qualifying activities, up from the previous 80%.

This change follows the 2025 Budget Speech announcement and aligns the Diesel Refund Scheme with its original policy intent. The amendment will be made to Note 6 to Part 3 of Schedule 6 of the Customs and Excise Act, 1964, to reflect the new 100% refund rate.

Although the adjustment is effective from 1 April 2026, it will be applied from the April 2026 VAT return period and will reflect in the calendar month in which that return is submitted (i.e. May 2026). SARS has confirmed that, given normal VAT filing deadlines, claimants will not be disadvantaged during the system upgrade process

Affected diesel claimants should take note of the upcoming amendment and prepare for implementation from the April 2026 VAT cycle.