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Pay now, argue later

South Africa

The Tax Administration Act requires taxpayers to first make payment to SARS on assessment and then to pursue their various remedies against SARS. Taxand South Africa looks at why it is important to understand the circumstances in which you will not have to make a payment to SARS of the disputed tax. 

If the taxpayer eventually persuades South African Revenue Service (SARS) or a court that the assessment was incorrect and the tax was not owed by it the disputed amount will be refunded to the taxpayer with interest. Not every taxpayer has the appetite for a constitutional challenge to the pay now argue later principle. Instead taxpayers generally wish to understand the provisions set out in the TAA dealing with a suspension of their obligation to make payment to SARS.

The law provides that a senior SARS official may suspend the payment of the disputed tax or a portion thereof having regard to:

  • the compliance history of the taxpayer
  • the amount of tax involved
  • the risk of dissipation of assets by the taxpayer concerned during the period of suspension
  • whether the taxpayer is able to provide adequate security for the payment of the amount involved
  • whether the payment of the amount involved would result in irreparable financial hardship to the taxpayer
  • whether sequestration or liquidation proceedings are imminent
  • whether fraud is involved in the origin of the dispute
  • whether the taxpayer has failed to furnish information requested under the Tax Administration Act

Discover more: Pay now, argue later

Your Taxand contacts for further queries are:
Bernard du Plessis
T. +27 11 269 7891

Peter Dachs
T. +27 21 410 6620

Quality tax advice, globally

Taxand's Take

An interim interdict can only be obtained by way of motion proceedings. The prescribed time periods will apply unless it would result in the applicant not being able to obtain the required relief in which event the applicant can bring proceedings on an urgent basis. 

Taxand's Take Author

Bernard Du Plessis
Taxand Board member
South Africa
Sub-Saharan Africa

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