Your Tax Deadlines for February 2026
- 06 February – PAYE submissions and payments
- 25 February – VAT manual submissions and payments
- 26 February – Excise duty payments
- 27 February – VAT electronic submissions and payments, CIT Provisional Tax payments where applicable and PIT Second Provisional Tax payments for the 2026 year of assessment.
So, You Want to Diversify? You Might Be Making a Mistake
“Any intelligent fool can make things bigger and more complex. It takes a touch of genius, and a lot of courage, to move in the opposite direction.” (Statistician and economist, E.F. Schumacher)
Diversification makes intuitive sense. When one revenue stream falters, another should compensate. When one market cools, another heats up. In theory, it’s prudent. In reality, however, as businesses accumulate products, geographies, customer segments and internal processes, decision-making slows and execution weakens. What began as risk management turns into managerial overload. The uncomfortable truth is that sometimes executing fewer things extraordinarily well, for longer than competitors can tolerate, is sometimes the path to true success.
Whether you’re selling koeksisters from your garage or leading a multinational tech behemoth, the ten pointers below are worth taking note of.
Diversification feels safer than it actually is
Diversification offers psychological comfort. It gives leaders the sense that they are “covered” from uncertainty. But safety in theory is not safety in execution. Each new product, market or channel introduces its own operational demands, regulatory requirements, customer expectations and failure points. Risk doesn’t disappear, it fragments. Instead of managing one or two critical risks deeply, leadership is forced to shallowly monitor many. The illusion of safety often masks a rise in systemic fragility.
Complexity is a hidden tax on performance
Every additional business line adds meetings, reporting layers, decision pathways and coordination costs. These costs rarely appear cleanly on an income statement, but they erode margins all the same. Management attention becomes diluted. Strategic conversations shift from “How do we win?” to “How do we keep everything from breaking?”
Focus is a force multiplier
Focused companies learn faster. They serve customers better because feedback loops are tight and clear. When something goes wrong, causes are easier to identify and fix. When something goes right, it can be scaled with confidence. Diversified organisations often struggle to replicate this clarity. Success in one unit is obscured by mediocrity in others. Focus doesn’t just improve execution, it sharpens strategic judgment.
Diversification often masks unresolved core weaknesses
One of the most under-discussed drivers of diversification is discomfort. When growth slows in the core business, expanding outwards can feel more exciting than fixing what’s broken. Unresolved issues, weak unit economics, unclear positioning, operational inefficiencies … These things don’t vanish when you diversify, they multiply to new areas. The same leadership blind spots and process failures are often replicated across a wider footprint. If you’re wondering whether diversification might be hurting you, feel free to ask for our input – sometimes a fresh perspective is all it takes.
Operational excellence doesn’t scale sideways
What works brilliantly in one context rarely translates seamlessly into another. Different customer segments require different value propositions. Different geographies demand different logistics, pricing structures and cultural understanding. Founders often underestimate how bespoke excellence truly is. Horizontal expansion assumes transferable competence – but in reality, each new area requires its own learning curve. The result can be a portfolio of businesses that are all “good enough,” but none exceptional.
Small and fast – Or big and slow?
Speed is one of the greatest advantages of entrepreneurial organisations. Diversification erodes it. As organisations grow broader, decisions require more stakeholders, more data reconciliation and more compromise. What once took days now takes weeks. Opportunities expire while you’re trying to coordinate a Teams meeting to discuss them. In fast-moving markets, this loss of velocity can be fatal. Competitors with narrower focus can outmanoeuvre diversified incumbents simply by deciding, and acting, faster.
Diversification can dilute brand meaning
Strong brands stand for something specific. They occupy a clear mental position in the customer’s mind. Diversification blurs that signal. Customers struggle to understand what the company truly excels at. Is it premium or mass? Specialist or generalist? Innovative or reliable? When brand meaning weakens, pricing power follows. What was once differentiation becomes confusion – and confusion is rarely profitable.
The most resilient businesses often look concentrated, not diversified
History is filled with companies that endured precisely because they stayed narrow. They dominated niches, controlled quality obsessively and reinvested relentlessly into their core advantage. Their resilience came not from spread, but rather from deep customer relationships, deep expertise and deep operational mastery. Concentration allowed them to absorb shocks because their fundamentals were strong, not because they were hedged.
Simplicity is not stagnation
Rejecting diversification does not mean rejecting growth. It means choosing growth paths that reinforce the core rather than distract from it. Vertical integration, geographic expansion of a proven model, or deeper penetration of the same customer segment can all drive scale without overwhelming complexity.
Don’t ask “Can we?” but “Should we?”
Most businesses diversify because they can, not because they should. Capital is available. Talent is curious. Opportunities appear abundant. But the cost of complexity is rarely paid upfront, it is paid slowly, in lost clarity, slower execution and diminished excellence. Leaders who understand this ask a harder question: what must we protect at all costs and what are we willing to walk away from?
February Provisional Tax Deadline: How to Avoid Stiff Underestimation Penalties
“Today, it takes more brains and effort to make out the income tax form than it does to make the income.” (Alfred E. Neuman, Mad Magazine Mascot)
Provisional tax is among the most confusing aspects of the tax regime – and it’s also the most heavily penalised. There are numerous declarations and payments overlapping throughout each year, not to mention a raft of rules and exceptions.
The next provisional tax deadline for the 2026 tax year (coming up on 27 February 2026) is also the trickiest and most important provisional tax deadline of the year. This is because the income estimates declared must be highly accurate. A stiff 20% under-estimation penalty can apply if the declared income estimate doesn’t fall within 80–90% of the actual taxable income.
Our professional assistance is your ticket to avoiding non-compliance and stiff penalties.
Must you pay provisional tax?
- Companies are automatically provisional taxpayers.
- Individuals who receive income other than a salary may also be provisional taxpayers, depending on various criteria. This includes sole proprietors and may include members of CCs and company shareholders / directors that earn income not fully subject to PAYE. SARS places the onus on you to determine if you are liable for provisional tax, so it’s best to check your status with us if in any doubt.
- Other taxpayers include trusts and any person notified by the SARS Commissioner. Exceptions and thresholds apply in every instance, so be sure to verify with our team of tax professionals.
What is provisional tax?
Provisional tax is not a type of tax, but rather a way of paying an annual income tax liability in two or three payments during a tax year. This prevents taxpayers from facing one large tax bill at year-end when the annual personal income tax (PIT) return or corporate income tax (CIT) return is filed.
Making provisional tax payments allows you to spread the tax liability across the year. But it also creates additional administrative obligations (calculations, returns), and increases the risk of penalties – particularly under-estimation penalties.
Three provisional tax payments each year
The following rules apply to individuals and to companies / trusts with a year of assessment running from 1 March to 28 February:
- First payment: Due within six months of the start of the year of assessment. For the 2026 year (which commenced on 1 March 2025), this was due end August 2025. This forward-looking payment is based on half of the total estimated tax for the full year, less employees’ tax already paid and any applicable tax credits and rebates.
- Second payment (due 27 February 2026): This is retrospective and based on the total estimated tax for the full tax year, less provisional tax and employees’ tax already paid in the first period, and any applicable tax credits and rebates. The rules are far stricter with harsh penalties for under-estimating.
- Third payment (optional): Can be made after the end of the tax year but before the issuing of the annual income tax assessment by SARS each year, typically by 30 September.
Bear in mind that SARS can ask for your estimate to be justified, so you’ll need accurate records of all source documents and calculations used. SARS can even increase the estimate if they’re dissatisfied with your amount, and this is not subject to objection or appeal.
Further penalties to watch out for
- Late filing: If an IRP6 is filed more than four months after the deadline, SARS will consider a ‘nil’ return to have been submitted. Unless actual taxable income really was zero, an under-estimation penalty will also apply.
- Interest charges: Interest will be levied on underpayment of provisional tax resulting from under-estimation.
- Late payment penalty: Not making provisional tax payments on time will result in an immediate 10% penalty, regardless of whether it’s not paid at all or simply paid late.
Rely on our expert assistance
The rules of provisional tax are daunting and confusing, yet SARS holds provisional taxpayers responsible for their tax affairs.
SARS recommends that the provisional tax estimate is determined sensibly and by careful reasoning and judgement, in a mathematical manner, and using experience, common sense and all available information.
