Tax experts have warned South African taxpayers to understand their rights
Image: Timothy Bernard / Independent Newspapers
Tax experts have warned South African taxpayers to understand their rights when SARS enforces collection action on bank accounts or income, saying some actions may be challenged and, in certain cases, reversed.
The revenue service has legal powers to recover unpaid tax, including taking money directly from bank accounts, ordering employers to deduct from salaries, and using third parties to collect debts from taxpayers who are in arrears.
Nico Theron, founder of Unicus Tax Specialists SA, said the revenue service has significant but not unlimited collection powers, and taxpayers should not assume deductions are always lawful.
"The mistake taxpayers make is assuming that because SARS has taken the money, they must have been entitled to do so," he said.
He added that in some cases, SARS collection action can be challenged and even reversed, depending on whether statutory requirements were properly followed.
“Taxpayers often assume the money is gone and that their only option is a slow complaint or escalation process. While that is sometimes true, it isn’t always the case. If SARS’ collection action is unlawful, the right intervention can stop further action and may even result in SARS paying back money that has already been taken.”
"If the problem is unlawful collection action, the taxpayer must respond to that problem directly. The wrong procedure can waste days that the taxpayer simply does not have."
Theron said taxpayers often only realise there may be a dispute after funds have already been deducted, by which stage cash flow pressure can be immediate, particularly for salaries and businesses.
He also said that "this distinction is important because collection disputes are often not solved through the ordinary objection process. A taxpayer may be able to object to an assessment, but the collection step itself may require a separate and urgent strategy".
“If SARS has acted outside the law, the aim is simple: stop the collection, reverse the damage and recover the money. We’ve seen matters change within days once the legal issue is identified and raised properly".
mthobisi.nozulela@iol.co.za
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