Can SARS take money before an objection is finalised?
30 March 2015
Posted by: Author: SARS
Q: Can SARS clean
out a client’s bank account without notifying him, while an objection has not
been finalized by SARS? We notified the SARS debt management department that an
objection was not yet finalized and that the outcome is based on the supporting
documentation supplied, which will materially affect the outstanding income
A: The ‘pay now
argue later’ principle applies to tax debts.
Note section 164(1)
of the Tax Administration Act:
Payment of tax pending objection or appeal.—(1) Unless a
senior SARS official otherwise directs in terms of subsection (3)—
the obligation to pay tax; and
the right of SARS to receive and recover tax,
will not be suspended by an objection or appeal or pending
the decision of a court of law pursuant to an appeal under section 133.
In other words, SARS is entitled to the tax debt that on the
ITA34 (by the due date stated therein), notwithstanding the fact that the
taxpayer disputes such an amount.
Section 164(2), however, provides the following recourse to
A taxpayer may request a senior SARS official to suspend the
payment of tax or a portion thereof due under an assessment if the taxpayer
intends to dispute or disputes the liability to pay that tax under Chapter 9.
This is what is usually referred to as a ‘suspension of
payment’ request. It can be made by writing a letter to SARS, motivating why
the payment of tax should be suspended until finalisation of the dispute. Section 164(3) lays out the factors SARS will
take into account when considering whether to permit the suspension request.
The letter can accompany the objection, and would then be
forwarded internally by SARS to their collections department.
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.