This follows the introduction of Chapter XB into the Customs and Excise Act, 1964 in late 2024, which marked an important milestone in South Africa’s customs and excise landscape. For the first time, the legislation introduced a dedicated VDR regime, providing taxpayers with a statutory mechanism through which historical customs and excise non-compliance may be regularised, provided the legislative requirements are met.
The draft rules published now proposes the insertion of Rules under sections 77ZH and 120 of the Customs and Excise Act, which aim to govern the VDR process.
While the proposed rules do not fundamentally alter the legislative requirements for obtaining VDR, they represent an important administrative development. Like any voluntary disclosure regime, the success of Customs and Excise VDR depends not only upon the relief available under the legislation itself, but equally upon clear, practical and predictable procedures through which that relief may be accessed.
Comments must be submitted by 25 August 2026.
Providing Greater Procedural Certainty
Perhaps the most significant aspect of the proposed rules is not any individual provision, but rather the creation of a dedicated procedural framework regulating the administration of Customs and Excise VDR.
The proposed Chapter XB Rules prescribe how VDR applications are to be submitted, the information applicants must disclose, the supporting documentation required for different categories of disclosures, the form of Voluntary Disclosure Agreements and the procedures applicable where additional information or customs determinations become necessary before an application can be finalised.
From a practical perspective, this certainty is important.
Voluntary disclosure is often undertaken in circumstances where taxpayers are already seeking to regularise historical defaults. Clear procedural requirements reduce uncertainty regarding what SARS expects from applicants, improve consistency in the preparation of applications and should contribute towards more efficient administration of the VDR process.
Removing Barriers to Voluntary Compliance
A welcome proposal concerns taxpayers who were required to be registered or licensed under the Customs and Excise Act but failed to do so.
The draft rules recognise that such taxpayers must first regularise their registration or licensing position before participating fully within the customs system. Importantly, where an application for VDR is submitted within 21 working days after the relevant registration or licence has been issued, the disclosure will be regarded as voluntary for purposes of Chapter XB.
This is a sensible and pragmatic approach.
Absent such a provision, taxpayers could potentially have found themselves in the difficult position of first having to regularise their registration status before becoming eligible to seek voluntary disclosure relief, creating uncertainty regarding whether the subsequent disclosure retained its voluntary character.
By recognising a defined 21 working day period following registration or licensing, the proposed rules remove that uncertainty and encourage taxpayers to address both issues promptly.
The approach is also consistent with principles already familiar within South Africa’s broader tax administration framework, promoting greater consistency across different voluntary disclosure mechanisms.
Anonymous Eligibility Opinions Reduce Uncertainty
Another particularly positive feature is the introduction of anonymous requests for non-binding private opinions regarding eligibility for VDR.
The proposed rules permit prospective applicants to request SARS’ view on whether the relevant facts are likely to satisfy the legislative requirements for voluntary disclosure relief without disclosing their identity. The request must contain sufficient information to enable SARS to assess eligibility while excluding any identifying particulars.
This proposal is likely to prove valuable in practice.
Taxpayers are frequently reluctant to approach SARS where uncertainty exists regarding whether the legislative requirements have been satisfied, particularly where previous engagement with SARS has occurred or where the surrounding factual circumstances are complex.
Allowing taxpayers to obtain a non-binding indication of eligibility before formally identifying themselves should encourage earlier engagement with the VDR process and provide greater confidence to taxpayers genuinely seeking to regularise historical customs and excise non-compliance.
Supporting More Efficient Administration
The proposed rules also provide detailed guidance regarding the information and documentation expected to accompany VDR applications.
Separate requirements are prescribed depending upon whether the disclosure concerns bills of entry, returns and accounts, rebates, drawbacks, refunds, payments or other forms of customs and excise underpayments. Applicants are further required to provide comprehensive factual explanations demonstrating how the legislative requirements for VDR have been satisfied.
The draft rules also recognise that certain VDR applications cannot properly be determined until tariff, valuation or origin determinations have been finalised. Rather than requiring SARS to determine applications on incomplete information, provision is made for the VDR process to be suspended pending the outcome of those determinations, while ensuring that taxpayers cannot utilise the determination process simply to delay the finalisation of their applications indefinitely.
Collectively, these provisions should assist both taxpayers and SARS by promoting greater consistency in the preparation, consideration and finalisation of VDR applications.
A Welcome Addition to South Africa’s Customs Compliance Framework
Importantly, the proposed rules do not expand the legislative scope of Customs and Excise Voluntary Disclosure Relief.
Applicants must still satisfy all the statutory requirements contained in Chapter XB of the Customs and Excise Act before relief may be granted. The proposed rules do not reduce those requirements or create additional forms of relief.
Their significance lies elsewhere.
By establishing a dedicated procedural framework governing the practical administration of VDR applications, SARS has sought to provide certainty regarding how the legislative regime will operate in practice. That certainty benefits taxpayers seeking to regularise historical customs and excise defaults while simultaneously supporting consistent and efficient administration by SARS.
Conclusion
The publication of the draft rules represents an important step in the continued implementation of South Africa’s Customs and Excise Voluntary Disclosure Relief regime.
Although procedural in nature, the proposed insertion of Chapter XB into the Customs and Excise Rules provides clarity regarding the operation of the VDR process. The recognition of a practical solution for unregistered and unlicensed taxpayers, the introduction of anonymous eligibility opinions and the detailed procedural guidance governing VDR applications are all welcome developments that should strengthen confidence in the regime.
If adopted substantially in their current form, the proposed rules should enhance procedural certainty, encourage greater utilisation of the Customs and Excise VDR regime and further support the objective of promoting voluntary compliance within South Africa’s customs and excise system.
