Tax Debt

A tax debt is a liability that a taxpayer owes to the South African Revenue Service (SARS) for overdue income tax. The Government will use any means legally possible to collect such debts. Nobody is immune to the tax collector and by law all taxes WILL be collected.

If SARS claims that a taxpayer has a tax debt and the taxpayer is of the belief that no taxes are owed, he may call in the services of a tax professional to verify whether the claimed tax debt is correct. SARS does make mistakes from time to time and if a taxpayer firmly believes that a claim in wrong, he will be given the opportunity to prove it. It is imperative to have all the errors corrected before SARS resorts to property seizure or similar means to collect the money.

If you have a tax debt, communicate with SARS, but never do nothing. If you do nothing, the debt collection process will continue and SARS will force you to pay, seize property or have you jailed. Communicate with them that you know you have a tax debt, but that you are having trouble paying it. You may arrange to pay the debt in instalments over a period agreed with SARS.

Under certain circumstances, the Commissioner of SARS may write off a tax debt if it is deemed that the tax debt is irrecoverable, because
* The debtor has been liquidated or sequestrated
* It cannot be collected by action and judgement of a court

However, keep in mind that a tax debt is still deemed recoverable if the debtor is a trust or a company, and the Commissioner has not first explored action against or collection from the personal assets of any shareholder, trustee, director or person(s) acting in the debtor’s management.

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For more information contact our call centre on 0861 21 22 23.