You know it’s tax season when there’s a rise in the old ‘death and taxes’ humour. But this year’s biggest clue has been the media hype around SARS’s artificial intelligence-driven tactics to enforce tax collections.
However, fearmongering isn’t helpful, says Roxanna Naidoo, head of global strategy at Latita Africa. She prefers to highlight the positives so taxpayers understand how to use SA’s tax mechanisms for their personal benefit.
“Whether you have an accountant, a tax practitioner or file your own tax return, look out for the following points to legally reduce what you owe SARS, maximise refunds, and combat tax debt in 2025,” says Naidoo.
Take control of your finances
“It’s true that SARS is increasing scrutiny and ramping up tax collection measures,” says Naidoo, who is seeing more clients receiving final letters of demand, verification requests or document follow-ups.
“But don’t panic,” she advises. “Tax season is an annual opportunity to assess your finances – a tool for getting your tax affairs in order. Go have a look at what you owe SARS; you may be surprised that SARS actually owes you money.”
Get ahead of the curve
Firstly, update your details on SARS’ eFiling system to avoid penalties. Your email address, phone and banking details must be accurate, so SARS can communicate with you. This will also enable access to the auto-assessment feature and the new express filing tool, which is a pre-filled tax return based on third-party data (from your employer, bank, medical aid).
Check before you click
“Don’t simply accept your auto-assessment without verifying it,” says Naidoo. SARS might not 100% accurately capture tax complexities, such as rental income, side-hustles and other sources of income or expenditure.
Even where discrepancies are due to missing third-party data, you are liable and may face penalties later.
“Therefore, check everything carefully,” says Naidoo. “If you’re unhappy with the auto-assessment, click on ‘request amendment’ and submit the corrections via eFiling.”
Reduce liability, maximise refunds
“Whether you’re an individual or a corporate, there are ways to reduce your tax liability and maximise the amount you get back,” says Naidoo.
As a South African tax resident, you must declare every income stream, even those from cryptocurrency or expat earnings already taxed overseas. But after declaring all your income, you can apply tax deductions, exemptions and credits.
Naidoo recommends claiming for medical expenses, retirement annuity contributions, charitable donations (with s18A certificates), home office and travel expenses, as well as tax-free savings accounts or capital gains tax.
Be meticulous
It is crucial to retain all relevant documentation, including receipts, statements, and records of expenses, exemptions, and tax credits “It doesn’t matter how and where you file these, as long as you keep them for five years,” says Naidoo. “SARS often requests back-dated documentation, so make sure you have the paperwork to prove your filing was compliant.”
Combat tax debt
Should you owe SARS money, don’t overextend yourself to settle it, cautions Naidoo.
“Taxpayers have legal recourse to avoid sinking further into debt.” You can, for example, negotiate to reduce the amount owed, or defer payments to ease your cash flow. Or, if SARS’ assessment is incorrect, you can submit a suspension of payment to stop them from attaching or freezing your bank account while you challenge it. And, if all fails, there’s mediation to settle a dispute cost-effectively.
“Ideally, you should take proactive, legal steps before SARS comes knocking, says Naidoo. “If you’re smart about it, you can still turn this tax season from a compliance burden into financial opportunity.”