Tax Court ruling: kickbacks and bribes are not tax deductible

Rand Notes Discover the implications of the recent Tax Court ruling on kickbacks and bribes, which confirms that such payments are not tax deductible under South African law. This landmark decision reinforces the country's anti-corruption efforts and highlights the importance of compliance for businesses.

Can a business claim a tax deduction for money it pays as a bribe or kickback? Under section 23(o) of the Income Tax Act, the answer is no.

The provision was introduced in 2005 to support South Africa’s anti-corruption efforts, and it denies a tax deduction for any payment that amounts to corrupt activity under our main anti-corruption statute, the Prevention and Combating of Corrupt Activities Act 12 of 2004 (the PCCAA).

For more than a decade, section 23(o) was rarely used. The recent Tax Court judgment of Taxpayer LE (Pty) Ltd v Commissioner for the South African Revenue Service, delivered on 10 April 2026, has now brought it firmly into the open.

The case in brief