The South African Revenue Service (SARS) has updated its systems and calculation methods to allow on-land primary sector diesel users to claim back 100% of the eligible diesel used in qualifying activities.
This is an increase from the 80% limit previously allowed, and it takes effect on diesel used from 1 April 2026.
According to SARS, the change comes as part of the announced adjustment to excise legislation under rebate item 670.04 of Schedule 6 to the Customs and Excise Act, Act No. 91 of 1964.
This rebate allows on-land diesel users in the farming, forestry, and mining sectors to claim a refund of all or part of the general fuel levies and the Road Accident Fund (RAF) levy.
The changes for 2026 follow an announcement to that effect from Finance Minister Enoch Godongwana in 2025.
In his 2025 Budget Speech, Godongwana announced that, to align with the policy intent of the Diesel Refund Scheme, the claim-back rate for on-land diesel users would be adjusted.
The 100% refund was submitted by Godongwana to provide some relief to affected industries in the wake of the fuel levy hike that took effect the same year.
Given the current state of fuel prices in the wake of the Middle East war—as well as the fuel levy hikes implemented this year—the bump to 100% will be welcome relief.
Diesel prices have surged significantly since the United States launched a war against Iran on 28 February 2026, rising by over R7 per litre in April, with another R7 per litre hike building for May.
SARS previously noted that the new rate will apply from the calendar month in which the VAT return must be submitted, i.e., May 2026.
Notably, diesel claims for May will exclude the R3 per litre cut to fuel levies granted by the National Treasury for April—or any direct relief in the future. However, the Road Accident Fund levy remains.
It is also expected that the R3 per litre will be added back into the fuel price—either gradually or in full—soon.
Regardless, SARS said its systems are now fully updated to process claims at the new levels.
“The eligible litres calculation has now been updated in the system and on the policy document,” SARS said.
SARS making it smoother to claim back
The upgrade to its systems follows other measures SARS put in place to help streamline the claims process.
In December 2025, the revenue service launched a digital modernisation process for the Diesel Refund System.
This provides a dedicated platform for diesel sellers and eligible users to register and submit diesel refund claims, on a standalone system decoupled from the VAT system.
This was done to enable SARS to reduce fraud and improve efficiency by tightening oversight of claims.
It also helps the service with better risk profiling and the development of a more modern, automated process.
Outside of the change, however, the standard terms and conditions apply.
For example, any diesel refund claim for the fuel levy and RAF levy must be submitted within two years of the date of purchase of the diesel.
All relevant documentation relating to diesel purchases, including logbook entries and other records, must be retained for five years.
These include entries which indicate the actual amounts of diesel purchased and used for eligible and non-eligible use during the tax period.
“Any diesel refund amount which is found to have been incorrectly refunded will have to be paid back to SARS, together with any penalties and interest that are applicable,” the tax service said.
