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SARS Now Accessing Bank Accounts To Get Payment

25 June 2010   (0 Comments)
Posted by: Author: Sharon MacHutchon
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SARS Now Accessing Bank Accounts To Get Payment

Section 99 is now not just a threat—it’s becoming a deadly weapon

SARS Is no longer merely threatening legal action to recover outstanding taxes; it has recently begun accessing taxpayers' bank accounts to recover its funds.It's not yet clear just how aggressive SARS will become in applying this form of collection in the future, but current Commissioner Oupa Magashula recently indicated that it maybe come common practice for SARS to take drastic action against defaulting taxpayers who delay their payments to SARS.

As revealed in the Budget Speech in March, due to the current economic climate SARS has not been able to replenish its coffers with the same vigour as in the past,resulting in the revenue deficit being greater than originally anticipated.

It appears that, where taxpayers default on their tax payments to SARS, it is now starting to approach taxpayers' bankers directly to pay over surplus funds from their clients' accounts. In terms of Section 99 of the Income Tax Act, SARS has the legislative authority to do so.

This Section gives the Commissioner the power to declare any person to be the agent of another. This agent may be required to make payment of any taxes, interest or penalty due to the Commissioner from any of the taxpayer's funds held by the agent,or due to the taxpayer by the agent(including salary, pension or any other remuneration).

In the past, SARS practiced this primarily at the time of issuing tax directives to employers or pension funds for the payment of lump sums. If any taxes were owed to SARS at the time of the directive being issued, the employer or fund would be required to withhold the outstanding tax from the lump sum amount to be paid to the taxpayer,and pay such outstanding tax over to SARS.

The question of whether Section 99 infringes on a person's basic human rights was addressed in the High Court in Hindry v Nedcor Bank Limited and Another in 1999,where Hindry contended that Section 99 of the Act violated the constitution in that it infringed the taxpayer's right of privacy and the right to just administrative action.

The court however held that such a course of action was "reasonable and justifiable in an open and democratic society”, and was therefore not unconstitutional.The court further stated that the limitation of a taxpayer's rights was legitimate, as collecting taxes should be seen as a benefit to South African society as a whole.

Source: By Sharon MacHutchon (Tax breaks)


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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