The South African Revenue Service (SARS) has intensified efforts to recover unpaid tax liabilities, and collective action can now be directed even against taxpayers with relatively modest debts, including deductions from bank accounts or salaries.
Expert Jashwin Baidhu, Partner and Head of Strategic Engagement and Compliance at Tax Consulting South Africa, warned that SARS is increasingly focusing on smaller debt amounts instead of exclusively targeting taxpayers with large debts.
According to Baidhu, SARS can issue a final demand letter for debts as low as R5,000 and proceed with enforcement measures if taxpayers do not respond. He noted that over the past eighteen months, SARS conducted a 'large-scale collection campaign, almost like a strike' during an online tax debt and dispute resolution masterclass.
This tougher approach comes as South Africa's total outstanding tax debt exceeds R600 billion, of which approximately R280 billion is recognized as collectible.
Do Not Abuse
According to a report by Tax Consulting South Africa on the recent Tax Indaba conference of the South African Institute of Taxation (SAIT), SARS Commissioner Johnstone Makubu stated that the revenue service aims to collect R126 billion from the collectible tax debt.
Makubu also cautioned taxpayers against using relief mechanisms intended for those genuinely unable to settle their obligations. The Commissioner warned at Tax Indaba 2026 that these mechanisms should not lead to fiscal leakage as taxpayers attempt to 'play games' with programs designed to provide legitimate assistance.
Without a Court Order
In accordance with Section 179 of the Tax Administration Act, SARS has the right to appoint a third party, such as a bank or employer, to recover unpaid taxes from funds held in a taxpayer's account. This means that, provided applicable legal requirements are met, SARS can instruct a bank to transfer money from a taxpayer's account or require an employer to deduct funds from their salary.
This specific mechanism does not require a court order; however, SARS must comply with statutory prerequisites, including serving a final demand notice at least 10 working days in advance. SARS confirms in its official guidelines that the appointment of third parties usually follows a final demand letter when the taxpayer has failed to settle the debt.
The revenue service can also pursue civil judgments, seize assets, and, under certain circumstances, initiate sequestration or liquidation proceedings.
Jashwin Baidhu advised taxpayers to act promptly after receiving a final demand, which typically gives them 10 working days to address the debt. Depending on the circumstances, they can settle the amount, request a payment plan, dispute the assessment, or apply for a compromise.
SARS provides an option for qualified taxpayers who cannot pay immediately to agree on installments, although interest may continue to accrue on the outstanding amounts. Individuals facing severe financial difficulties can also apply for a compromise, where SARS may agree to accept an amount less than the full debt. However, applicants must provide proof of their financial situation.
Tax Consulting South Africa reported that Makubu stated at Tax Indaba that nearly 90% of applications under the accelerated debt compromise procedure introduced in 2025 were rejected because applicants failed to demonstrate genuine financial hardship. In some cases, bank balances showed that applicants could afford significantly more than they proposed to pay.
Tax Consulting South Africa explained that taxpayers seeking debt relief acknowledge the debt amount but cannot pay it, whereas those who believe the assessment is incorrect can dispute it. Taxpayers who believe the assessment is wrong can lodge an objection, but this does not automatically suspend their obligation to pay. They can separately request a stay of payment while the dispute is being considered.
Andre Daniels, Head of Dispute Resolution at Tax Consulting SA, also warned that taxpayers need well-founded grounds for objections, as weak arguments can undermine subsequent appeals. SARS advises taxpayers who cannot repay their debts to contact the revenue service before enforcement measures escalate.