Trusts and non-profit organisations (NPOs) in South Africa are in the crosshairs of the South African Revenue Service (SARS) as the 2025 tax season begins. Experts are warning that these entities will face strict compliance checks, thanks to the tax authority’s expanded use of artificial intelligence (AI) and data analytics.
SARS has announced that its systems are more powerful than ever. These new tools will allow the agency to automatically assess tax returns and detect underreported income or suspicious submissions more effectively.
This move will especially impact trusts and NPOs, which must now submit detailed IT3(d) and IT3(t) forms for review.
Advanced AI Tools Target Non-Compliance in Trusts and NPOs
According to Tax Consulting SA, SARS is leveraging technology to increase revenue and catch errors or fraud faster. It will cross-reference donation claims and financial records to ensure full compliance, focusing on the integrity of the public benefit sector.
Section 18A-approved NPOs must submit IT3(d) forms that detail every tax-deductible receipt issued to donors during the assessment year. These submissions were due by 31 May 2025. Those that failed to meet this deadline now face serious consequences, including losing their tax-deductible status.
Even NPOs that submitted on time are not fully in the clear. If their data is incomplete or incorrect, they risk audits, penalties, and damaged relationships with donors and regulators.
Trusts are also being heavily monitored. They must now file IT3(t) forms annually, detailing all income and capital gains paid to beneficiaries. SARS expects full disclosure and has intensified its focus on ownership transparency within trusts.
Trustees must declare who the ultimate beneficiaries are and ensure records are updated. The submission deadline for IT3(t) is 30 September 2025. Failing to comply can lead to penalties—and trustees are personally and jointly liable for any non-compliance.
Tax Consulting SA warns that passive or inactive trusts are not exempt. SARS considers all trusts active and expects annual returns from every one of them. Simply calling a trust “dormant” won’t shield it from the law.
SARS Eyes R50 Billion in Extra Revenue
This sharp focus on trust and NPO compliance follows the 2025 Budget Speech, where SARS pledged to collect at least R20 billion more in revenue—and ideally push that figure to R50 billion. With a total revenue target of R1.986 trillion for the 2025/26 financial year, SARS is not taking any chances.
This year, tax season officially kicks off with auto-assessments running from 7 July to 20 July 2025. Individual taxpayers will file from 21 July to 20 October 2025, while provisional taxpayers and trusts have until 19 January 2026.
With technology on its side and aggressive revenue goals in sight, SARS is cracking down hard. Taxpayers—especially those involved in trusts and NPOs—must be accurate, timely, and fully transparent, or risk steep penalties in 2025.