Do I even need a tax practitioner?

The specialised knowledge that registered tax practitioners offer greatly benefits businesses and individuals to navigate more complex tax matters, including:

• multiple income streams
• multiple tax obligations (income tax, VAT, PAYE, SDL, UIF)
• optimisation of complex deductions
• industry-specific tax considerations
• capital gains calculations
• strategic tax planning opportunities.

Businesses that attempt to navigate tax matters alone or with unregistered help face significant risks like:

• missed opportunities for legitimate tax efficiency
• exposure to penalties and interest charges for errors or oversights
• increased likelihood of verifications and audits
• reputational damage
• potential criminal liability in cases of serious mistakes and omissions.

Using a registered tax practitioner can significantly reduce these risks, free up time to focus on your core business, and eliminate the stress of tax-related challenges.

Why must a tax practitioner be registered?

Section 240(1) of the Tax Administration Act mandates that anyone who provides tax advice or completes tax returns on behalf of others must be registered with both SARS and a Recognised Controlling Body, such as SAIPA, SAICA, SAIT or CIBA.             

To provide clients with assurance that their tax affairs are in capable hands, these professional bodies impose stringent criteria on registered tax practitioners, ensuring they are:

• qualified according to stringent industry-recognised criteria
• up-to-date with current tax legislation and professional development
• bound by professional codes of conduct or ethics
• accountable to a professional regulatory body
• able to provide recourse for substandard service or fraudulent activities
• covered by Professional Indemnity insurance
• supported by a technical support team for resolving complex tax issues. 

More benefits of using a registered tax practitioner

• Tax clarity and tailored tax advice: As SARS updates requirements and introduces new compliance measures, a registered practitioner can expertly advise your business in the evolving tax landscape.
• Strategic advice on legitimate tax efficiency measures like tax planning and structuring, industry-specific tax opportunities for your business, and additional services to streamline tax compliance.
• Critical protection is provided by ensuring accurate and compliant tax calculations and returns, maintaining documentation for potential audits, and proactively identifying and addressing potential compliance issues.
• Direct representation during SARS engagements including lodging and managing disputes, and experienced negotiation capabilities.
• Insurance cover: A registered tax practitioner carries Professional Indemnity insurance – providing an additional layer of protection should errors occur.  

Maximise value from our tax team

As SARS intensifies its compliance efforts, the guidance and protection offered by our professional tax team will become increasingly valuable.  Employing a registered tax practitioner is about much more than meeting a compliance requirement – it’s a strategic advantage that delivers expertise, protection, and peace of mind and helps secure your business’s reputation and financial future.

How do I know if a Tax Practitioner is registered?

1. Ask them for their PR Number.
2. Visit SARS’ Tax Practitioner Verification Link.
3. Enter the PR Number to confirm ongoing registration.

Budget proposals that will impact you

• The 0.5% VAT increases proposed for 2025 and 2026 will impact every South African, while disproportionately affecting lower-income households strained by high electricity costs, inflation and interest rates in a weak economy. To alleviate their impact on poor households, the list of zero-rated food items is extended to include canned vegetables, dairy liquid blends, and organ meats from sheep, poultry and other animals.
• Personal income tax brackets will not be adjusted for inflation for a second year running. This means that, like last year, individuals who receive a salary increase will again pay more tax, and could be pushed into a higher tax bracket.
• No inflation adjustments were proposed for tax rebates or medical tax credits – which once again translates into more tax payable by individuals.
• Above-inflation increases in the excise duties on alcohol (6.75%) and tobacco (4.75 – 6.75%) are no surprise. This means that with immediate effect, the duty on:

• • a 340ml can of beer increases by 16c
  • a 750ml bottle of unfortified wine goes up by 29c
  • a 750ml bottle of fortified wine goes up by 48c
  • a 750ml bottle of spirits will increase by R5.97
  • a 23g cigar goes up by R8.49
  • a pack of 20 cigarettes rises by R1.04
  • vaping products increase by 14c per millilitre
    
    
• Changes to the rules regarding the tax treatment of cross-border retirement funds are proposed.
• A one-year extension in the R370 social relief of distress (SRD) grant and above-inflation increases ranging from R30 to R130 per month in other social grants will provide minimal relief to the poorest South African households.
• SARS has been allocated R3.5 billion this year and an additional R4 billion over the medium term to enhance its tax collection capabilities, so taxpayers can expect increased scrutiny and administration.

Budget proposals that will impact your business

The 0.5% VAT increases proposed for 1 May 2025 and 1 April 2026 will certainly impact all companies in South Africa’s struggling economy, with a disproportionately negative impact on the small and micro businesses that are crucial to economic growth. 

• VAT hikes directly raise the cost of goods and services, impacting competitiveness and profitability.
• Higher prices resulting from the VAT increase will reduce consumer purchasing power in an already-constrained economy.
• The VAT increase could trigger inflationary pressures, further eroding household incomes and potentially forcing an interest rate hike.
• Two VAT increases over two years will also result in a significant administrative burden on businesses to implement the required changes to their systems.
• Carbon taxes increased from R190 to R236 per tonne on 1 January, while the temporary incentive for renewable energy introduced in 2023 has not been extended.
• From 1 April 2025, the formula to calculate the employment tax incentive and the eligible income bands will be adjusted.
• It is proposed that the sunset date for the urban development zone tax incentive be extended by five years to 31 March 2030.
• The Budget proposes to cancel the inflationary increase in the health promotion levy, and that the ad valorem excise duties on smartphones are limited to higher value phones.

Some good news

• The general fuel levy and the Road Accident Fund levy will not be increased again this year, providing tax relief of R4 billion. However, the carbon tax on fuel and diesel will increase. Budget 2025 also proposes an adjustment to the diesel refund for the primary sector for the next tax year.
• Property buyers will benefit from an upward adjustment of 10% in transfer duty brackets from 1 April 2025.
• A R1 trillion investment over the next three years in public infrastructure spending, focussed on transport and logistics, energy, and water and sanitation, should positively impact on the economy.
• Besides the proposals detailed above, Budget 2025 made no mention of a wealth tax or the National Health Insurance (NHI).
  
  In a media interview following the Budget Speech, the minister said that if the economy does well, the VAT increase in 2026 may not be necessary.

How best to manage your taxes going forward?

There is (at time of writing) uncertainty as to whether or not the Minister will proceed with his proposed tax changes – even if he fails to garner sufficient political support to ultimately ensure their adoption by parliament.  If he does proceed, it’s equally unclear how long they will be valid for. Regardless, expect a lot of political manoeuvring and perhaps some major changes in the weeks ahead!  As tax collection remains government’s main source of income (and SARS’ tax collection capabilities have been extended with billions in funding), you would be well-advised to rely on our expertise and advice to determine the impact of Budget 2025 on your tax affairs.