If you have outstanding tax debt, the SA Revenue Service (SARS) has the power to reach into your bank account and take the outstanding funds by instructing your bank, as its agent, to allow it access – sometimes even without notifying you.
In fact, the Tax Administration Act provides that SARS may notify any third party to pay any money it holds on your behalf to SARS. Failure to comply makes the bank (or even your employer) personally liable for your debt.
SARS is required to send you a final demand for payment 10 business days before it proceeds with the collection. It does seem however that there are cases in which SARS has withdrawn funds from taxpayers’ accounts without their being notified.
Tips for taxpayers
Taxpayers must be alert when it comes to any attempts by SARS to communicate with them, as failure to do so may result in the collection without your knowledge.
Ensure that your income tax statement of account (which can be drawn from your SARS eFiling profile) has no outstanding debt.
Even if you (or your appointed tax practitioner) lodge an objection to an income tax assessment, the SARS collection process is not suspended. You must always do a separate suspension of payment request, and this must contain the correct motivation.
Even when there is an obvious mistake on SARS’ part incorrectly claiming that you owe taxes or where a SARS official has assured you that the mistake will be rectified, SARS is not legally bound to solve your problem. SARS’ debt collection department is a separate business unit with its own objectives. It is removed from normal tax assessments and will pursue any outstanding debts if no suspension is in place.
Whilst the law must protect society to ensure that everyone pays their taxes, and defaulters must effectively be dealt with, unfortunately the innocent taxpayer is careful they may also get the same treatment under these harsh provisions.