SARS 2026: Mandatory Tax Numbers and Enhanced Enforcement

The Big Change: Mandatory Income Tax Numbers

From February 2026, employers will no longer be allowed to submit PAYE reconciliations without valid Income Tax Reference Numbers for every employee on their payroll.

SARS has been clear: "This grace period ends with the 2026 season. Reconciliations without valid Income Tax Numbers will be rejected and non-compliance will result in administrative penalties."

Who Needs Registration?

Income tax registration is required for all individuals earning above the tax threshold:

• R95,750 per annum for individuals younger than 65 years (2026 tax year)

Action Required

Audit your payroll for employees without tax numbers

Assist employees with SARS registration

Update your HR systems to require tax numbers at onboarding

Test your payroll submission process before February

Enhanced Technology and Enforcement

SARS has announced significant system modernisations for 2026, including:

Data Analytics and AI

• Improved detection of non-compliance
• More rigorous audits
• Enhanced collection of outstanding taxes

Third-Party Data Verification

Greater emphasis on proactive verification of:

• Retirement fund withdrawals
• Investment income
• International transactions
• Bank account transactions

SARS says: "In 2026, taxpayers can expect SARS to continue strengthening its enforcement, verification and compliance activities, supported by increasingly sophisticated technology."

The Tax Gap

SARS is attempting to close a tax gap estimated at nearly R500 billion. For businesses, this means:

• Expect more queries and audits
• Maintain meticulous records
• Ensure all income is properly declared

Key Dates for 2026

| Period | Deadline | ------------------ First Provisional Payment31 August 2025 Second Provisional Payment28 February 2026 Third Provisional (Voluntary)30 September 2026 Individual Filing SeasonJuly - October 2026 | Trusts Filing | September 2026 - January 2027 |

New ITR12 Features

Updates to the individual tax return include:

• New source codes 3623 and 3673 for backdated salaries and pensions
• Source codes 4306 and 4307 for local and foreign dividends
• Automatic carry-forward of unused foreign tax credits (up to 6 years)
• Separate wizard questionnaires for residents vs non-residents

Large Business Forum

SARS has launched the Large Business Forum focusing on "key taxpayers" across sectors. The large and international business segment contributed R600 billion in taxes in 2024-2025—expect continued scrutiny here.

Practical Steps

Register all employees for income tax before February 2026

Review your record-keeping for audit readiness

Reconcile third-party data (banks, retirement funds) with your submissions

Separate business and personal finances clearly

Consider professional tax planning given tighter enforcement

*Sources: SARS Official Announcements, BusinessTech, Daily Investor, Arcadia Finance*