With more than 2.4 million savings withdrawal applications approved by SARS by January 2025, many consumers may be disappointed to find that the tax consequences of those withdrawals can reduce, delay or absorb the refund they expected in 2026.
As tax season opens with billions in refunds already released, National Debt Advisors points to a growing risk among distressed middle to high income earners who are taking on short term credit in anticipation of tax refunds.
South Africa’s 2026 tax season has opened with a strong focus on auto assessments, faster processing, and early refund payments. By July 1, 2026, Sars had auto-assessed more than 1.9 million taxpayers and paid out about R8 billion in refunds within 72 hours.
For many taxpayers, this is positive. However, the speed of the process can create a financial planning risk when consumers treat an expected refund as available income before it has cleared.
A tax refund should only be treated as available cash once it has been paid into the taxpayer’s account. Until then, it remains subject to Sars processes, including verification, offsetting, compliance checks and potential adjustment.
