What are you using your tax refund on? Check these 3 things before you spend it
· Citizen
July is an important month for personal finances in South Africa. It marks the start of tax return season, when qualifying taxpayers receive refunds from the South African Revenue Service (Sars).
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At the same time, National Savings Month puts the spotlight on improving household financial health by encouraging South Africans to use money wisely, build emergency savings and reduce debt. Together, the two serve as a reminder that any tax refund received can be an opportunity to strengthen one’s financial position rather than increase unnecessary spending.
The tax season began on 1 July with auto-assessments, and those who are not auto-assessed have started filing for their tax returns from 13 July and have until 23 October 2026 for non-provisional taxpayers and 22 January 2027 for provisional taxpayers.
July is time to catch up
For households already managing petrol, groceries, school costs, repayments and insurance, there may not be much left to cut. Craig Whittaker, chief operating officer at Finchoice, says Savings Month should also be about catching up, not only cutting back.
“For those fortunate enough to receive tax refunds at this time of year, it is common to start planning how to spend that money several times over in your mind,” says Whittaker.
“While rewarding yourself is important, consider saving a portion of it, or using it to pay down high-interest debt first.”
Pay debt with your tax refund?
Whittaker says the point is not to treat every refund as a windfall that disappears immediately. Use the moment to check whether your financial plan still fits your life.
He says taxpayers should ask themselves where a lump sum like a tax refund will have the greatest long-term impact.
“If you have high-interest debt, using part of your refund to reduce the balance on a personal loan can lower the amount you owe and reduce the overall cost of borrowing. While it may be tempting to deposit the money into a credit card account, those funds are often spent again over time.
“Paying down debt directly is more likely to create lasting financial relief.”
Have your responsibilities changed?
Whittaker says taxpayers must assess whether their responsibilities have changed before making a decision on what to do with their tax refunds.
“Is there a new dependent, a parent needing support or a change in rent?” and when it comes to saving, he adds it is important to check if there is “a policy that no longer matches your household”. This way, one can allocate the policy premiums to savings or a debt that needs servicing.
Whittaker also advises taxpayers to ask themselves whether any expenses are coming soon.
“Whether its school costs, annual insurance premiums, vehicle maintenance or the festive season, using part of a tax refund to prepare for an upcoming expense can prevent unnecessary financial pressure later in the year.”
Here’s how people are spending their tax refunds
According to the latest update by Sarson 1 July 2026, more than 1.9 million taxpayers were auto-assessed with about R8 billion in refunds paid out within 72 hours.
More refunds would have been paid out to taxpayers since then. The Citizen reached out to some individuals who have received their tax refunds to figure out how they will be spending them.
Papadi Rantsoareng told The Citizen she spent her tax refunds on new winter clothes. “I was auto-assessed on 6 July, and I received my tax refund the next day. It came at the right time because there was a winter sale I have been looking at.”
Tebello Mokhotso said he had to file for his tax return on Tuesday, and according to his statement of account, the tax agency owes him a refund. “I will save my tax refund for my son’s birthday. He is turning 3 in October so I will use that money to book us a mini vacation.”
Katleho Mokoena said he will be putting his tax refund towards his tax-free savings account (TFSA). He is one of the taxpayers waiting to be refunded after filing manually.