This week we await the medium term budget policy statement and the headline numbers are likely to look kinder than they have in years. Look past the windfall, though. SARS is sitting on roughly R692 billion in tax debt, R134 billion of it disputed. That is less a debt book than a measure of how far the relationship between taxpayer and state has broken down.
Regulators are turning to technology and AI at pace, even without a national AI policy to guide them, and business would be unwise to wait for one before setting its own rules. The deeper concern lies with the regulators themselves.
By Moneyweb’s account, the CIPC saw the Nova collapse coming and failed to stop it, leaving former Sharemax investors with almost nothing. It is hardly the first such failure. NERSA and Eskom come to mind, as do VBS and the Post Office.
Enforcement, by contrast, is thriving.
SARS and the NPA have shown they will throw the book at defaulting taxpayers, as is their right. Yet SARS will pay Microsoft and IBM R2.75 billion even as it lists underfunding among its key risks. The machine is well fed.
Our readers know we have long criticised SARS’s hardened approach. We do not oppose compliance. We oppose a system that is unfair, unreasonable and, above all, unaccountable. Moneyweb is right that our tax system is out of step with our economy, and technology will indeed assist.
Accountability, however, is the real answer, because unfettered power has never fixed an institution any more than new laws have fixed a problem.
What South Africa needs is a compact in which taxpayers, business and government accept that they are partners in one ecosystem, not rivals. Our Adam Tas piece showed where compliance fatigue leads when that compact breaks.
Three centuries on, R692 billion suggests we are closer to that point than Wednesday’s speech will admit.
Featured Articles
A tax system in need of an overhaul
Amanda Visser reports that South Africa’s tax system is too complex for an economy stuck in low growth, which drives up compliance costs for business. Personal income tax, corporate income tax and VAT deliver almost 80% of collections. Yet businesses must still navigate a long list of smaller levies, including carbon, tyre, electricity and plastic bag levies. Dawie Roodt calls for fewer taxes at lower rates, with tax revenue close to 30% of GDP. Dr Albertus Marais argues that VAT discourages businesses from adding value.
Criminality of non-compliance: Sars and NPA team up to pursue personal liability of directors and representatives
Writing for Tax Consulting SA, Jashwin Baijoo argues that failing to submit tax returns is a criminal matter that can reach individuals personally. On 9 October 2026, former Telkom CEO Sipho Maseko was convicted in his capacity as a director after five of his companies failed to submit 85 returns to SARS. Under Section 234(2)(d) of the Tax Administration Act, wilful or negligent failure to file is an offence carrying a fine or up to two years’ imprisonment. Section 180 adds personal liability for tax debt.
CIPC saw the Nova disaster coming – and failed to stop it
Moneyweb reports that the CIPC knew of Nova’s financial distress but failed to act decisively. Under a 2012 Section 311 Scheme of Arrangement, Nova took over the Sharemax properties and had to repay investors within 10 years. A CIPC investigator found reasonable doubt about the board’s intention and capacity to repay, and recommended supervision or administration. The board stayed in control. Apart from a 2022 ban on property sales, the CIPC took no further action. Nova missed its January 2022 deadline and is insolvent.
Local insurers go solo amid AI policy vacuum
ITWeb reports that South African insurers are quickly catching up with banks in adopting AI. Because the country has no National AI Policy, they are writing their own AI frameworks. The draft national policy was withdrawn this year after it cited fictitious, AI generated references, and the DCDT now aims to finalise it in the 2026/2027 financial year. KPMG’s 2026 insurance survey finds AI in use for claims assessment, underwriting, fraud detection and client engagement. It is not yet used for actuarial valuations or finance, because people still need to oversee it
Notice to the Legal Profession and the Public the Rendering of Legal Services by Persons Who Are Not Practising Legal Practitioners: The Judgment in Damons N.o. And Another V Bezuidenhout and Section 33 of the Legal Practice Act 28 of 2014
On 15 October 2026, the Legal Practice Council issued a notice correcting public commentary on Damons N.O. v Bezuidenhout, a 2025 Pretoria High Court judgment. The court found that a former advocate who disclosed his status and prepared draft documents for a client did not contravene Section 33 of the Legal Practice Act. The Council stresses that this unreported ruling by a single judge gives graduates, paralegals and consultants no general right to render legal services. Court appearances, conveyancing, notarial work and trust money remain reserved.
Sars to pay Microsoft and IBM R2.75-billion in sole-source deals
SARS’s 2025/2026 annual report shows R2.75 billion in sole source contracts approved without open tenders. Of this, R1.58 billion renews Microsoft licences and support for three years, and R1.17 billion covers IBM hardware, software and services. Both contracts used framework agreements negotiated by the State IT Agency. The spending supports SARS’s AI drive. Its Lwazi assistant has answered more than 2.7 million taxpayer questions, staff use an internal assistant called Pulse, and Microsoft Copilot has been deployed. SARS lists underfunding among its key risks.
