Corporate and Commercial

T, A, X, AS EASY AS A, B, C.

Posted 23 March 2023

Jeanine Uys

The mere mention of the word "T A X" can cause a frown. Most people find it both daunting and challenging to deal with their own taxes.  I often witness a change of expression on the faces of friends, family and colleagues when I tell them that I spend most of my days dealing with tax disputes. Although people think that this work is extremely complicated, it is not, and need not be feared.

In this article I will try to give an easy overview of the steps available to anyone dealing with a tax dispute.  Although the facts and circumstances of each case will differ, what follows is intended to make the provisions of the legislation more accessible and comprehensible.

Remember that there is help out there – either self-help or here, at MacRobert Attorneys, if you do find yourself embroiled in a tax dispute.

When a SARS audit commences, it is important to understand your rights and obligations. If you disagree with an assessment or decision by SARS, you can take action and need not merely accept their finding.

The dispute resolution process is initiated when a taxpayer is aggrieved by an assessment, or disagrees with a decision taken by SARS, if this decision is subject to objection and appeal. A taxpayer then has a right to dispute the assessment or the decision.

Dispute resolution is dealt with in terms of chapter 9 of the Tax Administration Act, 28 of 2011 ("The TAA") and the rules promulgated under section 103 of the TAA. This provides the framework for disputes across all tax types found in the various Tax Acts, excluding the Customs and Excise Act. The important principle to remember is that SARS is a creature of statute and its jurisdiction and powers are limited by the provisions of the TAA and the rules.



The filing of a notice of objection, a notice of appeal or a request for remission of an administrative penalty for non-compliance, can all initiate the dispute process.

Disputes can be lodged against the following SARS decisions:

  • Assessments pertaining to personal and corporate income tax
  • Value-Added tax (VAT)
  • Pay-as-you-earn (PAYE) and employment tax incentive (ETI)
  • Unemployment insurance fund (UIF)
  • Skills development levy (SDL)
  • Interest and penalty on late payments;

Disputes can easily be avoided by taking the necessary care when submitting tax returns or when providing SARS with the supporting documents that they require. Often, when submitting a return, or liaising with SARS, incorrect declarations and underestimations are provided. Bear in mind that SARS raises an assessment on the information you have provided and this may then result in a dispute.

A further example of a dispute is as a result of non-adherence to the prescribed time frames for submitting documents. Also, a failure to act or submit a return when required can result in a dispute and the subsequent imposition of administrative penalties.

To summarise - a dispute arises when a taxpayer does not agree with a decision by SARS but, as illustrated above, can be avoided in certain circumstances. However, if you are not in agreement with SARS, then the dispute resolution process must be followed.


A taxpayer is entitled to request reasons for an assessment by SARS when he or she is aggrieved by the assessment and the grounds provided in the assessment do not enable him or her to comprehend the basis on which the assessment has been made. A better understanding of this basis will allow the taxpayer to formulate an objection.

The filing of the request for reasons is a formal step and the time frames for this are dealt with in the rules. The prescribed form and manner for the request must be followed and the request must be submitted to SARS within 30 days from the date of the assessment. The period allowed for the filing of an objection will be extended if a request for reasons has been submitted.

A request for reasons can only be submitted in the following three circumstances:

  • Firstly, when an original assessment, verification or audit completed by SARS has resulted in a notice of assessment (ITA 34, VAT217, EMP217);
  • Secondly, when a request for remission for account-related items has been finalised and the request has been disallowed or partially disallowed; and
  • Lastly, where a decision was taken by SARS to revise the assessment.


SARS will issue a penalty assessment notice to notify a taxpayer of the penalties that have been levied for non-compliance. The specific dispute process for penalty assessments, is the lodging of a request for remission for administrative penalty non-compliance

Penalties for personal and corporate income tax are levied in terms of chapter 15 of the TAA. The Act prescribes the types of non-compliance that are subject to a fixed amount penalty. For example, penalties against an individual taxpayer can be imposed for non-submission of an income tax return. In this example the penalty will be based on the taxpayer’s taxable income.

An administrative non-compliance penalty for the failure to submit a return comprises a fixed amount that can range from R250 to R16 000 a month, for each month that the non-compliance continues. If the taxpayer requests a remission of the administrative penalty for the failure to submit the return, and SARS disallows the request, the taxpayer can file an objection against this decision by SARS.

A taxpayer can object the imposition of certain other administrative non-compliance penalties or interest, where the request for remission of such penalty or interest was not allowed or partially allowed. Examples include:

  • Late payment on provisional tax;
  • Late payment on interest on provisional tax;
  • Late payment penalties for VAT, PAYE UIF and SDL;
  • Late payment interest on VAT and PAYE (but not SDL and UIF).


A taxpayer who is aggrieved by an assessment, has the right to object in terms of the TAA.

It might seem obvious, but bear in mind that a taxpayer can only object to a SARS assessment, not to a self-assessment.

The objection must also follow the prescribed form and manner stated in the rules and it must be filed within 30 business days after the date of assessment. If a request for reasons was submitted, the objection must be filed within 30 days after the reasons were provided, or, where SARS refuses to provide further reasons, or where SARS confirms that adequate reasons have already been provided, 30 days after  the taxpayer receives notice of this.

After delivery of the objection, SARS will within 60 days inform the taxpayer of the outcome. In certain circumstances, SARS can also request further documents before finalising the outcome of the objection. If the objection is allowed, partially or in full, SARS will issue a revised assessment to reflect this.


Once an assessment is raised, the tax liability comes into existence. Taxpayers are required to pay a tax debt even before a dispute is initiated or resolved. This principle is known as “pay now, argue later”.

The obligation to pay a tax debt arises when an assessment is issued, and the filing of an objection or appeal does not suspend it. This is also embodied in section 164 of the TAA. The obligation to pay tax, or the right of SARS to recover a tax debt which is due, is not automatically suspended pending an objection or appeal, unless SARS directs otherwise. The taxpayer does have the right to request SARS to suspend the payment of tax or a portion thereof, if the taxpayer intends to dispute his or her liability to pay the tax debt.

A request for suspension of payment will be disallowed if the taxpayer is non-compliant, if an appeal has already been unsuccessful, where the objection is disallowed and no appeal is filed, or if no objection is filed. SARS can also revoke an approved suspension of debt, should the taxpayer’s circumstances change.

SARS will consider in detail whether the recovery of disputed tax will be in jeopardy or if there will be a risk of dissipation of assets. The compliance history of the taxpayer is considered, as is the issue of whether fraud was involved in the origin of the dispute with SARS. SARS also considers whether payment will result in irreparable hardship to the taxpayer that is not justified by any prejudice that SARS or the fiscus might suffer should the disputed tax not be paid or recovered, and whether adequate security has been provided.

When a taxpayer applies for a suspension of payment, he or she will be informed of the outcome within 30 days of receipt by SARS of all the complete and accurate supporting documents. SARS will delay collection steps from the date on which a valid request for suspension of payment was submitted, until 10 days after the taxpayer has been informed that the request was declined, or that an approved suspension has been revoked.


If the objection was disallowed or only partially allowed, a taxpayer can decide to file an appeal against the decision by SARS. This must be filed within 30 days after the outcome of the objection. The period allowed for the filing of an appeal can be extended, if reasonable grounds exist, by a further 29 days. In exceptional circumstances the period in which an appeal may be filed can be extended by up to 45 days. No appeal can be submitted more than 75 business days after the date of the decision to disallow the objection.


The TAA creates a statutory framework for the resolution of disputes. This process can be compared and is similar to litigation that can be instituted in the High Court.

The appeal in the Tax Court is adjudicated by a High Court Judge, sitting in the Tax Court and two Assessors. An appeal against a decision of the tax court lies to the full bench of the High Court, which has jurisdiction in the area in which the tax court sitting is held, or to the Supreme Court of Appeal.

A dispute relating to a tax debt of less than 1 million Rands usually proceeds before the Tax Board, although the taxpayer may elect to refer to the matter to the Tax Court.

The Tax Court has jurisdiction to hear tax appeals against an assessment or decision where the tax debt exceeds 1 million Rands. Matters that involve important tax principles but fall below this threshold, referred to as test cases, can also be considered by the Tax Court.

Although normal pleadings are not filed, a rule 31 statement of grounds of assessment is filed by SARS within 45 days of date of the appeal, or date of termination of the ADR process. The taxpayer then has 45 days to file a rule 32 statement of grounds of appeal. The matter is then set down for hearing by the Judge and two Assessors. Evidence is provided and legal argument is allowed.

The Legal Practice Act 28 of 2014 precludes a lay person, who is not an admitted attorney or advocate, enrolled under this Act, from representing a taxpayer in a court. A person may represent him- or herself.


On appeal, a taxpayer can also indicate that he or she prefers to follow an alternative dispute resolution procedure. This means the taxpayer does not proceed with an appeal to the Tax Court.

The ADR process creates a structure, with the necessary checks and balances, within which disputes may be resolved and settled. A facilitator oversees the process. ADR is less formal and offer a quick and less expensive procedure to taxpayers. It is important that the taxpayer, at the stage of filing the notice of appeal, indicates that he or she wishes to make use of the ADR procedure.

SARS will inform a taxpayer within 30 days of receipt of the notice of  its decision, on whether the matter is appropriate for the ADR process. The rules prescribe that the entire procedure must be finalised within 90 days.

Should the ADR procedure be terminated without resolution, the taxpayer must within 20 days of the termination request the clerk of the Tax Board to set the matter down for a formal hearing or to refer the matter to the Tax Court for hearing. If this is not done, the appeal becomes final.


“The only things certain in life are death and taxes.” This oft-quoted statement of Benjamin Franklin remains true in 2023. Fortunately, tax matters need not be feared and, for disputes that do arise, the TAA provides legal solutions and resolutions.



The article has no binding legal effect and the relevant legislation must be consulted in detail.