Taxpayers have been warned that the South African Revenue Service (SARS) is adopting a stricter approach to defending tax assessments as more disputes move into litigation.
Niko Teron, founder of Unicus Tax Specialists, noted that the tax authority is becoming more inclined to defend its assessments in court. He advised taxpayers to act promptly if they disagree with an assessment and to treat the matter as a dispute from the outset.
Teron stated: 'SARS is much more willing to take matters to court to uphold its assessments.'
According to SARS's annual report for 2024/25, the tax authority achieved an 83% success rate in tax disputes that reached court. Teron emphasized that this statistic demonstrates the need for immediate action by taxpayers, without waiting to go to court, as people often mistakenly view a tax dispute as a compliance issue.
He clarified that 'compliance and disputes have always been different and separate legal processes.' Furthermore, he recommended reacting quickly after SARS establishes an obligation, as tax risks can have broader implications for businesses.
It is important to treat an audit and subsequent assessment you disagree with as a dispute from the beginning, even if an objection has not yet been filed. Teron urged taxpayers to carefully review SARS correspondence and audit findings, noting that there is a tendency to underestimate the response to audit findings.
He also advised not to give up when SARS challenges a taxpayer's objections. According to Teron: 'The tax authority can be wrong. Persistence, strategy, and technical knowledge will help you overcome obstacles.'
