Don’t borrow money hoping for tax refund, warns National Debt Advisors
· Citizen
With many taxpayers hoping for refunds from the South African Revenue Service (Sars), National Debt Advisors has warned against budgeting for money that is not guaranteed, saying it could lead to over-indebtedness.
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The country’s tax season began on 1 July with auto-assessments, and those who are not auto-assessed can file their tax returns from 13 July until 23 October 2026 for non-provisional taxpayers and 22 January 2027 for provisional taxpayers.
Tax experts have cautioned individuals to check their auto-assessments thoroughly before accepting them, and if they are not happy with the outcome, they can dispute the auto-assessment and file it manually.
Not everyone will receive a tax refund
Not every taxpayer is required to file a tax return, and even those who are will not necessarily receive a refund. Outcomes depend on a range of individual circumstances, so some taxpayers may receive a refund, while others may receive no refund or even owe additional tax.
Against this backdrop, financial expert and senior advisor at National Debt Advisors, Sharon Mmitsi, has warned people not to budget on potential tax refunds.
“Just because you get an SMS that says that you are expected to get a refund for this much, people tend to budget for that amount,” she told Newzroom Afrika.
“It is that before you get that amount, there are some things that need to be done, in case you owe tax or maybe if there are any penalties that you were charged, that amount needs to be deducted first before you get your refund.
“So people tend to budget for the money that they think they need, and that’s where the problem is.”
Relying on tax refunds is a worrying trend
It is concerning how many households rely on potential tax refunds, suggesting that many individuals are struggling to make ends meet.
National Debt Advisors is a debt counselling and debt review company. Mmitsi said people start borrowing money once they have received that notification with the refund they can expect to receive, or even when the tax season approaches.
“You now start borrowing money so that you can cover expenses in your household because you see you’re expecting a certain amount, or maybe start borrowing money for whatever you want to buy,” she said.
Over-indebtedness begins
Mmitsi said the problem starts when taxpayers get the refund, but it is not the amount that they had expected because of penalties or other factors.
This is when reality kicks in, because the money one had budgeted for is no longer enough for the debt or plans they have made. She advises taxpayers to first make sure how much refund they will receive and if they have any penalties before making plans.
“You log into your eFiling profile to check how much your refund is or how much you are liable to get a refund for.
“And the thing is, don’t even check first if you have any penalties or if there’s any money that you need to pay back.”
She cautioned that if taxpayers do not make sure how much they will receive, they might end up having to take out loans to cover the money they had initially borrowed because they had banked on the potential tax refund.