What to do if you owe SARS money

Understanding living wills
June 25, 2024

What to do if you owe SARS money


Owing money to the South African Revenue Service (SARS) can be stressful, but don’t panic. By understanding your options and taking prompt action, you can resolve the issue and minimise the impact. This guide will equip you with the knowledge you need to navigate a tax debt situation.

The importance of addressing tax debt

Take tax debt seriously. Not paying your taxes is a criminal offence under the Tax Administration Act, potentially leading to penalties or prosecution. Addressing the issue promptly is crucial.

How to find out how much you owe

The first step is determining your tax debt amount. SARS offers several ways to check:

– eFiling and SARS MobiApp: Log in and request a statement of account.

– SMS Service: Text a specific message to 47277 to receive a balance.

– USSD Service: Dial 1347277# and follow the prompts.

– SARS Contact Centre: Call 0800 00 7277 (local) or +27 11 602 2093 (international) with your tax reference or ID number.

Taking immediate action

If you have a tax debt, act promptly. Contact SARS to discuss your situation via phone, email, or mobile app. Aim to settle the debt within seven days to avoid additional penalties and interest. If immediate payment is impossible, explore alternative arrangements.

Payment solutions

If full payment isn’t feasible, consider these options:

– Instalment payment arrangement: You may be able to pay in instalments. This requires submitting a Collection Information Statement outlining your financial situation and justifying the need for instalments.

– Compromise of debt: In specific situations, SARS may allow settling the debt for a reduced amount. You’ll need to provide valid reasons and financial disclosures.

– Deferment of payment: If facing temporary financial hardship, you might qualify to delay your payment (interest will still accrue).

Disputing the debt amount

If you disagree with the amount owed, you have the right to dispute it. This involves filing an objection and potentially an appeal. During the dispute, you may request to suspend payment obligations, though interest might still apply.

Consequences of non-payment

Ignoring tax debt can lead to serious consequences. SARS can collect outstanding taxes through third-party appointments, where they direct someone else (like your employer or bank) to pay on your behalf. Unpaid debts may also result in a judgment against you, attachment and sale of assets, or even sequestration or liquidation proceedings.

Proactive management is key when dealing with SARS tax debt. Knowing your obligations, available solutions, and the repercussions of non-compliance empowers you to navigate the situation effectively. Speak to one of our tax professionals to regularly review your tax obligations.

While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither the writers of the articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein. Our material is for informational purposes.

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