The 2026 draft Tax Administration Laws Amendment Bill (TALAB), published on 30 July 2026, proposes expressly permitting banks to screen tax refunds for suspicious activity either before or after the money is deposited. According to Treasury’s description of the amendment, it does not create a new SARS power to freeze or seize funds held in a business bank account. Treasury states that banks are already required to report suspicious refunds to SARS and to hold them for up to two business days while SARS investigates. The bill is not law. Public comment closes on 28 August 2026.
A headline circulating since publication suggests SARS has been handed new powers over money sitting in South African bank accounts. The underlying draft legislation says something considerably narrower. For directors and finance teams, the distinction is worth getting right, because the genuine exposure lies somewhere other than where the coverage points.
What Treasury Published on 30 July 2026
National Treasury and SARS released the 2026 draft Taxation Laws Amendment Bill (TLAB) and the 2026 draft Tax Administration Laws Amendment Bill (TALAB) for public comment on 30 July 2026.
Both give effect to proposals announced in the 2026 Budget on 25 February 2026, alongside technical corrections. The TLAB implements the announcements in Chapter 4 and Annexure C of the Budget Review; the TALAB deals with the tax administration announcements in Annexure C. Written comments close on 28 August 2026.
One TALAB item has driven the strongest headlines. Treasury lists it as permitting pre- or post-deposit screening of refunds by banks. Treasury’s own explanation is more measured than the coverage suggests. Banks are already required to report suspicious tax refunds to SARS and to hold those refunds for up to two business days while SARS investigates. The proposed amendment aims to explicitly permit banks to carry out that screening either before the refund is deposited or after it reaches the account. Treasury states the objective as enabling a smoother refund process.
The 2026 draft TALAB formally proposes amending Section 190 of the Tax Administration Act, which governs the payment of refunds. By amending this specific section, the bill explicitly permits banks to identify and hold refunds they reasonably suspect are linked to a tax offence, confirming that the scope directly impacts standard refund payment procedures rather than creating entirely new asset-seizure powers.
What the Headlines Overstate
The draft does not extend the two-business-day hold. It does not create a new category of frozen account. It does not give SARS a fresh power to reach into an operating account and remove working capital. What it does is clarify where in the payment chain an existing screening obligation may be exercised.
Timing is not a trivial detail. A refund that appears and then becomes unavailable reconciles very differently from one that arrives late. But the underlying obligation is not new.
Tax Consulting South Africa has raised one of the substantive open questions. There is currently no published guidance on the risk matrix banks will use to decide whether a deposit is linked to a tax offence. Until that framework is visible, businesses cannot model their exposure with any precision. That is a legitimate point for the comment process, and it is the kind of issue the consultation window exists to surface.
The Power That Already Exists
There is, separately, a genuine SARS power over funds held in bank accounts. It has existed for years, and it is frequently confused with the proposal now under discussion.
Section 179 of the Tax Administration Act allows SARS to appoint a third party, commonly a taxpayer’s bank or employer, to pay money held for that taxpayer over to SARS in settlement of an outstanding tax debt. This is the third-party appointment process. Most businesses encounter it as the AA88 notice issued to an employer in respect of an employee’s tax debt; a notice issued to a bank in respect of the company’s own debt operates under the same section.
The section carries procedural protection. Under section 179(5), the notice may only be issued after SARS has delivered a final demand for payment at least ten business days beforehand, setting out the recovery steps available and the debt relief mechanisms under the Act. South African courts have enforced this, setting aside notices and ordering repayment where the process was not followed.
The practical point for directors is this. Real exposure to funds leaving an account sits with unresolved tax debt and unread SARS correspondence, not with the refund screening proposal now out for comment.
Why the Commercial Exposure Is Larger
Most coverage has framed this around personal income tax refunds. The commercial exposure is larger, and it sits in VAT.
In its preliminary revenue results published on 1 April 2026, SARS reported that its administrative efforts prevented an estimated R75.0 billion in total revenue leakage for the full 2025/26 financial year. The same release records total VAT refunds actually paid for the year at R371.1 billion. SARS notes that prevented or impermissible refunds are not necessarily fraudulent. The figure covers refunds it determined should not be paid, including ordinary errors, weak documentation, and unsupported claims.
That is the signal for a compliant business. Refund scrutiny is broad, and it catches accuracy problems as readily as criminal ones. For exporters, capital-intensive projects and EPC contractors running consistent input VAT positions, a refund delay is a cash flow event rather than an inconvenience.
The Risk Does Not Start at the Bank
The Office of the Tax Ombud’s draft report into alleged e-filing profile hijacking, published on 1 October 2025, is the most instructive document for corporate readers.
In the OTO’s own survey, conducted between 3 February and 5 March 2025 with 393 respondents, tax practitioners were the most frequently affected group at 48.3% of reported incidents, followed by individual taxpayers at 32.7%. Separately, SARS data reported to the OTO records an average intake of 387 new hijacking cases a month and 15,968 cases in total as at October 2025. Most fraudulent amounts sat below R10,000, although a considerable number fell between R10,000 and R100,000, and the largest single case in the report exceeded R460,000.
The finding that should concern company directors is this one. Syndicated tax fraud frequently begins with unauthorised changes to company director information at the CIPC. The chain runs from corrupted statutory records to a compromised eFiling profile to altered banking details to a diverted refund. By the time a bank screens a payment, several controls have already failed.
Read: SARS SATMS Online Traveller Declaration: What Businesses in South Africa Need to Know
Practical Steps Before 28 August 2026
Four actions are worth taking now.
1. Reconcile your SARS banking details. Confirm they match the registered entity exactly and that any change runs through a controlled internal process rather than an ad hoc one.
2. Audit your CIPC records. Directors, registered address and beneficial ownership filings should be accurate and monitored for unauthorised change.
3. Tighten eFiling access. Enforce two-factor authentication and revoke access for anyone who has left the business or ended an engagement.
4. Consider a submission. Comments go to National Treasury (AnnexCProposals@zatreasury.onmicrosoft.com) and SARS (acollins@sars.gov.za) by close of business on 28 August 2026. The absence of a published bank risk matrix is a reasonable point to raise.
Where We Land on This
The refund screening proposal is a modest clarification with a real but manageable operational consequence. The attention it has attracted is disproportionate to its likely effect. The more serious issue sits upstream.
A business whose CIPC records are current, whose banking details reconcile to the registered entity, and whose eFiling access access is controlled will find bank-level screening close to invisible.
A business without those controls was already exposed and remains so whether or not this amendment is enacted. That is the discipline worth building now, ahead of enactment rather than in reaction to it.
Read: How SARS Holds Individuals Accountable with Lifestyle Audits
How Wiltons Supports Clients Through This
The controls that protect a refund are ordinary compliance controls, maintained consistently. This is the year-round discipline we described in our article "Transform Your Tax Compliance With Intelligent Automation."
Our Compliance, Tax and VAT team manages VAT registrations, submissions and retrospective reviews, alongside SARS verifications, audits and disputes. We also act as public officers for foreign entities, which establishes a single accountable channel for SARS correspondence.
Our Company Secretarial team maintains statutory registers, annual returns and beneficial ownership filings with the CIPC. Given where syndicated fraud originates, keeping those records accurate is a security measure rather than an administrative formality.
At the front end, our Company Registration and Support team handles statutory registrations and banking liaison for account opening and KYC, which is where entity and banking detail mismatches are best prevented.
Centralising these functions removes the gaps that open when several providers each assume another is watching.
Frequently Asked Questions
1. Does the 2026 draft TALAB allow SARS to take money out of my business bank account?
No. The proposal concerns the screening of tax refunds paid by SARS to taxpayers. It does not create a power to remove funds already held in a business account. A separate and long-standing provision, section 179 of the Tax Administration Act, deals with the recovery of outstanding tax debt through third-party appointment.
2. What is actually changing with tax refund screening?
The amendment would expressly permit banks to screen refunds either before the deposit is made or after it reaches the account. Banks are already required to report suspicious tax refunds to SARS and to hold them while SARS investigates. Treasury describes the change as enabling a smoother refund process.
3. How long can a bank hold a tax refund?
Up to two business days, while SARS investigates. That period is the existing position, and the draft amendment does not extend it.
4. Does this apply to VAT and company income tax refunds, or only to individuals?
Yes. The draft bill specifically amends Section 190 of the Tax Administration Act. Because this section governs the payment of all tax refunds and is not confined to a single tax type, businesses receiving VAT or company income tax refunds fall squarely within the scope of the proposed bank screening.
5. Is this law yet, and when would it take effect?
No implementation date has been confirmed. However, tax administration amendments of this nature typically come into effect on the date the final Act is promulgated, unless a specific alternative commencement date is proclaimed.
6. What will cause a bank to flag a refund as suspicious?
No criteria have been published. Tax Consulting South Africa has specifically noted the absence of guidance on the matrix banks would use to assess whether a deposit is linked to a tax offence. This remains one of the open questions in the consultation.
7. What can a business do to reduce the risk of a delayed refund?
Keep banking details registered with SARS accurate and matched to the legal entity; ensure returns are supported by complete documentation; keep CIPC records current; restrict and monitor eFiling access; and resolve verification queries promptly rather than allowing them to age.
8. Can SARS already take money from a bank account for an unpaid tax debt?
Yes, under section 179 of the Tax Administration Act, through a third-party appointment. SARS must first deliver a final demand for payment at least ten business days before issuing the notice, setting out the recovery steps and the available debt relief mechanisms. Courts have set aside notices where that process was not followed.
Speak to Wiltons
If your business relies on VAT refund cycles or you are uncertain whether your SARS and CIPC records are aligned, we can review your position while the draft is still open for comment.
Email support@wiltons.co.za or call +27 11 873 0234.
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