SARS Gets New Teeth: Tax Administration Changes That Affect Your Practice

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On 31 March 2026, President Ramaphosa signed the Tax Administration Laws Amendment Act, No. 4 of 2026 (TALAB 2026) into law. The new provisions came into affect on 1 April 2026, no April Fool's joke. The changes are in effect now.

For business accountants in practice, these changes are important. They include understatement penalties, SARS's collection powers, the objection process, SARS inspection rights, High Court procedures, and how notices are served to companies. Each of these has a direct bearing on how you advise clients and how you manage disputes when they arise. Here is a plain-language breakdown of every significant change, section by section.

The "Honest Mistake" Defence Has Been Repositioned, Sections 222 and 223

This is the change that has received the most attention, and for good reason.

Under the old law, a taxpayer could invoke the bona fide inadvertent error defence at the very beginning of a penalty dispute. If successful, it removed the case from the understatement penalty regime entirely, before SARS even examined how the error occurred. For large taxpayers with complex affairs, this was a powerful and frequently used shield.

The TALAB 2026 changes the sequence entirely. SARS now tests the taxpayer's behaviour first, using the listed behaviours in the penalty table, looking at:

• Reasonable care not taken

• No reasonable grounds for the tax position adopted

• Gross negligence, and intentional tax evasion.

If the understatement resulted from any of these listed behaviours, the bona fide error defence is simply no longer available for that category. It does not get a hearing. The only situation where the error defence still applies is for substantial understatements, those meeting the threshold of the greater of R1 million or 5% of the tax chargeable or refundable. And even then, it applies only after the behaviour question has been answered in the taxpayer's favour.

The one remaining lifeline is the disclosure-and-opinion pathway. For this to work, the taxpayer must have made full disclosure of the arrangement giving rise to the understatement by no later than the date the relevant return was due, and must have been in possession of a written opinion from an independent registered tax practitioner, also issued by that same return due date, confirming that the position is more likely than not to be upheld in court. The opinion must exist when the return is filed. If SARS opens an audit six months later and you go looking for a supporting opinion then, it is already too late.

The practical implication for your practice: any complex, borderline, or aggressive tax position held by a client requires a written opinion from an independent registered tax practitioner before the return goes in, not after.

As covered in our previous article, understanding the impact of the Tax Administration Act on accountants, the penalty framework is specifically designed to hold practitioners accountable for the positions they support, and these amendments tighten that framework significantly.

Taxpayers Can Now Apply to Suspend Payment While Disputing an Assessment, Section 164

This is the most practically useful change in the Act, and it has not received nearly enough attention.

Previously, if SARS issued an estimated assessment, which it can do when a taxpayer fails to file returns or provide information on time, that debt became immediately due and payable. SARS could then move to attach bank accounts, garnish salaries, or seize assets before the taxpayer had any opportunity to prove the assessment was wrong or inflated.

The amendment now expressly allows a taxpayer who has requested, or intends to request, a reduced assessment under section 95(6) of the Tax Administration Act to apply for a suspension of payment. In plain language, while SARS considers whether to revise the assessment downward, the taxpayer can apply to temporarily halt enforced collection on the disputed amount.

This is meaningful relief. It does not mean SARS must agree or that collection is automatically stopped, SARS retains discretion to refuse the suspension if it considers the fiscal interest at risk. But it gives taxpayers a formal mechanism to buy time and protect themselves from enforcement action before the assessment dispute is resolved.

Note: The practical risk here is unchanged: if your clients fail to file returns or fail to respond to SARS information requests on time, SARS will issue an estimated assessment, and the debt becomes immediately enforceable. The suspension mechanism only helps if the client acts quickly and correctly. Refer to CIBA's step-by-step breakdown of the SARS dispute process for the procedural steps to follow.

Ten Business Days' Written Notice Required Before High Court Proceedings, Section 11

Before a taxpayer or practitioner can institute legal proceedings against SARS in the High Court, they must now give SARS a minimum of 10 business days' written notice, unless the court directs otherwise. This is a procedural change aimed at giving SARS an opportunity to resolve matters before litigation begins. In practice, it means that any contemplated High Court challenge against a SARS decision must be planned earlier and more deliberately. The notice requirement also creates a formal paper trail, which cuts both ways, it documents the taxpayer's position before proceedings and may assist in cost arguments later.

Objection Extension Periods Have Been Limited and Aligned, Section 104

The amendment to section 104 clarifies and limits the extension period available for lodging an objection. Previously, there was some ambiguity about whether extensions could be requested for cases falling under both section 104(4) and section 104(5). The amendment resolves this by aligning the wording with section 107(2), which also provides for a maximum period of extension.

In plain terms the window to object is now more clearly defined and capped. If a client misses the objection deadline and the extension period has elapsed, the assessment may become final and unappealable regardless of its merits. Deadline management for all SARS disputes needs to be treated as a non-negotiable workflow item, not an afterthought.

Alternative Dispute Resolution (ADR) Is Now Available During the Objection Phase, Section 104

ADR was previously only available after the objection phase had concluded. The amendment allows it to be initiated while an objection is still pending. This is a genuinely new option.

ADR is generally faster and less costly than litigation. Being able to pursue it earlier in the dispute process means some matters can be resolved before they escalate to the Tax Court. For any client with an open dispute, it is worth considering ADR at the objection stage rather than waiting for the objection to run its full course.

Tax Court May Now Extend the Period for Lodging an Appeal in Certain Circumstances, Section 107

The Tax Court has been given discretion to extend the period within which a taxpayer may lodge an appeal, in appropriate circumstances. This is a narrow but welcome change, it introduces a safety valve for cases where the appeal deadline was missed for genuine reasons, rather than leaving taxpayers without recourse entirely.

What All of This Means for Your Practice Right Now

The changes that matter most are around understatement penalties and how disputes are managed. The defence options for clients with large or complex tax positions have narrowed. The timing requirements are stricter. The standard of preparation required to protect a client has moved up.

Review any client files where a tax position is borderline or involves amounts that could cross the R1 million threshold. Ensure that a written opinion supporting those positions is obtained before the next return is filed. Tighten your objection deadline tracking. And where a client already has an open dispute, consider whether ADR during the objection phase is an option worth exploring now rather than later.

The filing season is approaching. The changes are already in effect.