Navigating tax debts: Solutions and support for owing taxes

tax compliance
12 Jul 2023

Discover the consequences of owing taxes and the importance of tax compliance. Learn how to request payment arrangements from SARS and receive assistance from qualified tax practitioners. Avoid criminal offenses and enforcement collection actions by seeking professional support.

What if I owe the tax man?

No one likes owing people money. Even worse, no one likes owing the government money.

It’s especially difficult when one doesn’t know exactly how much or from how far back this debt extends, because your contact details changed, and you have missed all their correspondence.

While you may think that this is a valid excuse to get away with not paying your taxes, the law would disagree. According to the South African Revenue Service (SARS) it is every citizen’s responsibility to ensure that they are tax compliant.

This means that you are certain that:

  • Your contact details are up to date;
  • You know your tax status;
  • You are submitting an accurate and complete return, on time; and
  • You pay the amount indicated in communications from SARS, within 7 days.

Remember, just because you have not heard from SARS, does not mean that you are tax compliant. You need to contact SARS to confirm your tax compliance status by requesting a statement of account via your e-filing profile or enlisting the help of a qualified tax practitioner like us.

We understand that taxes are quite complicated and that many people do try and leave it for as long as they think they can get away with it, however we are here to help you.

Think of us as your companion in tax compliance.

Our dedicated team of highly skilled, qualified tax practitioners are here to unpack the tax process and help you get comfortable with making tax compliance one of your good habits!

Many of our clients make use of our tax services every year, to ensure they can cross one more thing off their list of things to do. Even if you have not joined us yet, R450 will get you the peace of mind of being in safe hands.

If you need assistance with making payment to SARS, or requesting a payment arrangement be put in place, you can contact us, and we will be there every step of the way.

Some important things to know if you need to request a payment arrangement:

SARS may enter into a payment agreement only if:

  • The taxpayer suffers from a lack of assets or liquidity which is reasonably certain to be remedied in the future;
  • The taxpayer anticipates income or other receipts which can be used to satisfy the tax debt;
  • Prospects of immediate collection activity are poor or uneconomical but are likely to improve in the future;
  • Collection activity would be harsh in the particular case and the deferral or instalment agreement is unlikely to prejudice tax collection;
  • The taxpayer provides the security as may be required; and
  • All outstanding returns and/or recons are submitted.

If you are choosing to dispute the amount you owe SARS, we can assist too. However, you should be aware that you are expected to pay the amount owed, and based on the outcome of the dispute you may be credited that amount at a later date.

On a final note, remember that failing to pay your taxes without at least making an arrangement to that end, is a criminal offence. There are serious consequences if you choose to ignore SARS communications and not make payment.

SARS can, and will, institute “enforcement collection actions” as follows:

  • Collect the money against any third party in terms of Section 179 of the Tax Administration Act;
  • Issue a Civil Judgement against the taxpayer;
  • Attach the assets of the taxpayer;
  • Hold the directors/members/related parties liable for the debt;
  • Sequestrate/liquidate the taxpayer;
  • Preserve the assets against the debt.

So rather avoid that all together and just give your Compliance Companion a call instead!

With Legal and Tax, you’re not alone

Article sourced from Legal & Tax.

See also:

(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)
Johan Swart

Johan Swart is head of Tax at Legal&Tax. He is registered as a Master Tax Practitioner with SAIT and has been with Legal&Tax for 13 years. Read more about Johan Swart


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