LETTER FROM A CEO - May 2026

For years many businesses treated trusts, including B BBEE ownership vehicles, as quiet structures that could sit comfortably in the background of a corporate hierarchy. Those days are officially over.

SARS has shifted its focus firmly toward trust enforcement. The numbers speak for themselves. Out of 300,000 registered trusts in South Africa, only 180,000 are filing returns. This massive gap has triggered a swift regulatory crackdown, and the financial implications of ignoring it are severe.

The new penalty regime leaves zero room for error:

• Compounding Monthly Penalties: Fines range from R250 to R16,000 per outstanding return, compounding every month for up to 36 months.

• No Exemptions: Every single trust must file annual returns, whether it is active, dormant, or passive.

• Total Accountability: Trustees, accountants, and service providers are directly on the line.

To put the financial risk into perspective, a single outstanding return at the higher tier can cost your business up to R576,000 over three years. If you have multiple outstanding returns, these penalties run simultaneously, creating an exponential liability.

Beyond the numbers, the risk ripples across the entire chain:

• Trustees face personal and escalating liability until compliance is met.

• Beneficiaries are being tracked, exposing their personal tax affairs if the main trust filings are incomplete.

• Companies with B BBEE Trusts risk devastating reputational damage, financial loss, and the sudden erosion of their hard earned empowerment credentials.

Procrastination in this new regulatory climate multiplies your exposure.

We advise our clients to immediately elevate trust compliance to a board level governance priority. If you operate an empowerment structure, treat your B BBEE trusts as high compliance vehicles, because SARS certainly does.

The immediate next steps are clear: halt active penalties by prioritizing the filing of 2024 and 2025 returns, and conduct a thorough historic compliance review to stop parallel escalation in its tracks.

Let us ensure your compliance structures protect your business rather than endanger it.

Warm regards,

Hilton Johnson

CEO