As the 2026 tax filing season approaches, taxpayers should begin preparing the information required to submit accurate tax returns. While the filing season is often viewed as an annual administrative exercise, recent developments highlight the increasingly serious consequences of non-compliance.

The South African Revenue Service (SARS) continues to strengthen its enforcement measures through the use of estimated assessments, recurring administrative penalties and third-party appointment notices, requiring employers and other institutions to collect outstanding tax debts on SARS’ behalf.

2026 Tax filing season deadlines

The 2026 tax filing season covers the period from 1 March 2025 to 28 February 2026 for all taxpayers, excluding companies. SARS has confirmed the following filing periods:

• Auto Assessments: 1 July 2026 to 12 July 2026
• Non-provisional individual taxpayers: 13 July 2026 to 23 October 2026
• Provisional individual taxpayers: 13 July 2026 to 22 January 2027
• Trusts: 13 July 2026 to 22 January 2027

Companies, approved public benefit organisations and approved recreational clubs are required to submit their income tax returns within 12 months after the end of their financial year and are therefore not subject to the filing season deadlines applicable to individuals and trusts.

Taxpayers who receive automated assessments should carefully review the information used by SARS against their supporting documentation, including IRP5 certificates, medical aid certificates, retirement annuity certificates and investment certificates. Where SARS’ information is incomplete or incorrect, a return must be submitted before the applicable deadline to ensure that the assessment accurately reflects the taxpayer’s true tax position.

Consequences of non-submission of tax returns

Many taxpayers incorrectly assume that failing to submit a return merely delays the assessment process. In reality, SARS has several legislative mechanisms available to enforce compliance and recover outstanding amounts where taxpayers fail to meet their filing obligations.

What often starts as an overlooked or outstanding tax return can ultimately result in estimated assessments, recurring administrative penalties and direct collection action by SARS. The common thread across these measures is non-compliance with filing obligations.

Estimated assessments

Section 95 of the Tax Administration Act (TAA) empowers SARS to issue an estimated assessment where it is unable to determine a taxpayer’s correct liability based on the information available. These provisions are broad and may apply to personal income tax, corporate income tax, VAT, PAYE and other taxes administered by SARS.

Estimated assessments may arise where:

• a required return has not been submitted;
• information requested by SARS has not been provided;
• supporting documentation requested during a verification or audit is not submitted; or
• the information available to SARS is incomplete or insufficient to determine the taxpayer’s true tax position.

When raising an estimated assessment, SARS may rely on information already available from various sources, including prior-year returns, PAYE submissions, VAT returns, employer declarations, banking information and other third-party data. The resulting assessment may therefore differ significantly from the taxpayer’s actual position and could result in additional tax, penalties and interest becoming payable.

The most effective way to avoid estimated assessments is to ensure that returns are submitted on time and that any information requested by SARS is provided promptly and in full.

Administrative penalties for outstanding income tax returns

In addition to estimated assessments, SARS may impose fixed-amount administrative penalties for the failure to submit income tax returns when required.

These penalties are imposed under section 210 of the TAA and apply independently of any tax liability reflected on a return. Depending on the taxpayer’s taxable income, the penalties currently range from R250 to R16 000 per month.

Administrative penalties are not limited to individuals and may also be imposed on companies and trusts. In such cases, SARS will generally issue a final demand requiring submission of the outstanding return before penalties are levied.

Administrative penalties recur monthly for as long as the non-compliance continues, up to a maximum of 35 months. Consequently, even relatively modest penalties can accumulate into substantial liabilities where returns remain outstanding for extended periods.

The simplest way to avoid these penalties is to ensure that all returns are submitted within the prescribed deadlines and that any SARS correspondence is addressed promptly.

AA88 third-party appointment notices – a consequence of non-compliance

An increasingly common trend is the issuance of SARS third-party appointment notices (AA88 notices) to employers. In many instances, these arise as a direct consequence of administrative penalties that have accumulated over time due to outstanding income tax returns, rather than unpaid income tax liabilities themselves, although in some instances both may be present.

An AA88 is issued in terms of the TAA and authorises SARS to appoint a third party to collect an outstanding tax debt on its behalf. In the employment context, SARS instructs the employer to deduct specified amounts from an employee’s remuneration and pay those amounts directly to SARS. Once issued, the employer is legally obliged to comply with the notice and effectively acts as a collection agent for SARS.

For affected employees, the financial impact can be significant. Deductions made in terms of an AA88 reduce monthly take-home pay and may place considerable pressure on personal cash flow, particularly where administrative penalties have accumulated over a number of years.

The increasing prevalence of AA88 notices serves as a practical reminder that the consequences of non-submission extend far beyond administrative inconvenience. What may begin as an outstanding tax return can ultimately lead to recurring penalties, estimated assessments, debt collection proceedings and compulsory deductions from an employee’s salary. In many cases, these outcomes could have been avoided through the timely submission of tax returns and early engagement with SARS when compliance issues first arose.

Conclusion

The 2026 tax filing season provides an ideal opportunity for taxpayers to review their tax affairs and ensure that all filing obligations are up to date. SARS continues to invest heavily in data-driven compliance initiatives and automated enforcement mechanisms, enabling it to identify outstanding returns and pursue non-compliant taxpayers with increasing efficiency.

Whether through estimated assessments, recurring administrative penalties or AA88 third-party appointments, the message from SARS is clear: compliance with filing obligations is no longer optional. Taxpayers who prepare early, maintain accurate records and submit their returns on time will not only avoid unnecessary penalties and collection action but will also ensure that their tax liabilities accurately reflect their true tax position.

Please reach out to our tax department at tax@asl.co.za should you have any questions regarding the 2026 tax filing season.