New standard for Sars in suspension-of-payment disputes

A landmark judgment is set to reshape suspension-of-tax-payment disputes and taxpayer rights in South Africa.

- Amanda Visser

Tax experts believe it may bring an end to “reflexive no” responses from the South African Revenue Service (Sars) to suspension of payment requests.The High Court in Pretoria judgment in the R525 million case between a businessman and Sars highlights the need for Sars to take relevant facts into account and to provide comprehensive reasons for denying suspension of payment requests.

Nico Theron, tax dispute specialist and founder of Unicus Tax Specialists, says taxpayers feel frustrated and helpless because the pay-now-argue-later rule is “real, immediate and brutal”.

The Tax Administration Act (TAA) states that a taxpayer must pay a tax liability and then argue later. But it also allows a taxpayer to request a suspension of payment if they intend to or are already disputing the tax liability.

Relevant factors