How to Reduce or Remove a SARS Penalty in 2026

Can You Reduce or Remove a SARS Penalty?

Yes. SARS has several mechanisms for reducing or removing penalties, depending on the type of penalty and your circumstances. The Tax Administration Act provides for penalty remission, objections, and the Voluntary Disclosure Programme (VDP) — each with different requirements and outcomes.

The key to successfully reducing a SARS penalty is acting quickly, understanding which remedy applies to your situation, and presenting a well-documented case.

1. Remission of Penalties (Section 217)

Under Section 217 of the Tax Administration Act, SARS has the discretion to remit (waive) administrative penalties in whole or in part. This is the most common remedy for ANC penalties and late payment penalties.

SARS will consider the following factors when deciding whether to grant remission:

• Whether you have filed the outstanding return or paid the outstanding tax
• Whether this is a first offence or a pattern of non-compliance
• Whether there were reasonable grounds for the non-compliance (illness, system issues, etc.)
• Your overall compliance history with SARS
• Whether the non-compliance was intentional or accidental

2. Voluntary Disclosure Programme (Section 226)

The VDP is specifically designed to reduce understatement penalties. If you have understated your tax liability and SARS has not yet issued an assessment, you may qualify for the VDP.

The benefits of a voluntary disclosure are significant — for example, a gross negligence penalty of 75% can be reduced to just 35% through the VDP. For substantial understatements, the penalty can be reduced to 0%.

To qualify, the disclosure must be voluntary (not prompted by a SARS audit), complete, and made in the prescribed manner. See our VDP guide for full details.

3. Objection and Appeal (Section 104)

If you believe SARS has incorrectly assessed a penalty — for example, if the behaviour classification for an understatement penalty is wrong — you can lodge a formal objection under Section 104.

An objection must be lodged within 30 business days of receiving the assessment. It should clearly state why you believe the assessment is incorrect and include supporting documentation.

If the objection is unsuccessful, you can escalate to an appeal before the Tax Board or Tax Court.

4. Compromise of Tax Debt (Section 200)

In exceptional circumstances, SARS may agree to compromise (settle) a tax debt for less than the full amount owed. This typically applies when a taxpayer can demonstrate that they are unable to pay the full amount and that SARS would recover more through a compromise than through enforcement.

This remedy is less common and is usually a last resort after other options have been exhausted.

Tips for a Successful Remission Request

• Act quickly — the sooner you address the non-compliance, the stronger your case.
• File or pay first — SARS is much more likely to grant remission if the underlying non-compliance has been resolved.
• Document everything — gather evidence of reasonable grounds (medical certificates, system outage records, etc.).
• Be honest — misrepresenting the facts will weaken your case and may attract additional penalties.
• Use the correct process — submit your remission request through the proper SARS channels (eFiling or at a SARS branch).
• Consider professional help — a tax practitioner can significantly improve your chances of a successful outcome.