Turnover tax explained

What changed in Budget 2026

• The qualifying turnover limit rose from R1 000 000 to R2 300 000 (SARS gives 1 April 2026 as the effective date).
• The 0% band rose to R600 000, with 1%, 2% and 3% bands above it. The bands had not changed since 2009.

Who can use it

Sole proprietors, partnerships, close corporations, companies and co-operatives with qualifying turnover of R2 300 000 or less. You cannot use it if:

• more than 20% of your receipts are from professional services (for example accounting, legal, consulting or medical services) or from investment income;
• you are a personal service provider or labour broker;
• your company has a shareholder that is not an individual, or holds shares in other private companies;
• you were on turnover tax before and left it.

What it replaces

Income tax, provisional tax, capital gains tax and dividends tax on the business, and VAT, although you may stay registered for VAT. Your salary or other income outside the business is still taxed normally.

Paying and filing

• Interim payments on the last business day of August and of February, with the TT02 payment advice.
• The annual TT03 return, filed in the normal tax return season, then a final payment.
• Records: amounts received, dividends declared, and assets and liabilities over R10 000.

Registering

New businesses must apply within 2 months of starting to trade. Existing businesses can join from the start of a tax year. SARS accepts registrations through its online query system (SOQS) and by appointment.

Is it cheaper for you?

Usually when your profit margin is healthy, because the tax is on sales, not profit. Try the turnover tax calculator, which compares it with normal income tax.