SARS coming after salaries and bank accounts in South Africa
Tax experts have warned South Africans to update their communication details and keep tabs on all communication from the South African Revenue Service (SARS) before it’s too late.
This is because any issues with tax filings and money owed to SARS are handled via letters of demand and ‘subtle’ communication that can be easily missed.
If taxpayers do not address these letters from SARS in time, they may wake up to money being taken from their bank accounts directly, or having their salaries garnished.
According to tax experts at Latita Africa, taxpayers could even find their bank accounts frozen.
“A letter of demand from the taxman is like a financial fire alarm to jolt you into action to prevent the heat from turning into flames,” the group said.
“But don’t expect any shrill sirens or flashing lights to alert you to the fact that you owe taxes.”
When a tax issue is flagged, particularly if money is owed to SARS, the service typically uploads the letter of demand on a taxpayer’s eFiling profile and also sends an email or SMS notification.
However, it is up to taxpayers to ensure that their communication details are up to date and correct, as claiming to have not seen the letter is not a valid excuse.
Worse yet, ignoring the communication could be deemed negligent.
A letter of demand is a formal notice issued by SARS when the taxman believes it is owed tax. This debt is usually due to incorrect tax filings or a mismatch in data.
It can also include penalties on late submissions or underpayments from previous years, or reversed refunds after a SARS audit.
Latita Africa noted that SARS often sends reminders before it issues an official Final Letter of Demand, but these reminders are courtesy communications, not legally required steps.
“SARS can send SMSes, emails, or eFiling notifications reminding you of outstanding balances. These are not legal letters and don’t trigger the 10-business-day enforcement countdown.”
“The purpose is to give taxpayers a chance to settle before formal debt collection begins,” they said.
The final (and only) letter of demand is the first legal step in SARS’s debt collection. This is issued via eFiling, email, or physical post to your registered address.
This starts the 10-business-day period before SARS can take enforcement action, such as taking money directly from bank accounts, garnishing salaries, or even attaching properties.
Don’t ignore SARS
The tax experts stressed that there is no escaping SARS by sticking your head in the sand and pretending not to see its communications.
Without further warning, SARS can deduct money from your income via garnishee orders to your employer or clients.
The Revenue Service can also attach your bank funds, withhold tax clearances and refunds, and get a court judgment that will blemish your credit record.
“In cases of repeat non-compliance, SARS can even refer you to the National Prosecuting Authority,” they warned.
The experts said it is vital for taxpayers to stay on top of their tax affairs and to log in and check their SARS eFiling profiles for communication.
If a letter of demand has been issued, and the amount is correct and you are able to pay, do it immediately.
However, if you do not agree with the demand—or cannot pay—it is just as important to apply for a suspension of payment so you can dispute.
“This legal mechanism doesn’t cancel the debt but pauses SARS’s ability to collect. You can apply for a suspension of payment via eFiling or your tax representative,” the experts said.
“Attach a statement of financial hardship and your latest bank statements, or a note explaining your intention to dispute.”
If you accept your debt but can’t pay in full, SARS may agree to a deferred payment plan with instalments.
Or you could negotiate a compromise of tax debt, where SARS reduces your debt if the full payment would cause you financial hardship.
“If you believe the assessment is wrong, lodge a formal notice of objection on eFiling. You have 30 business days from the original assessment,” the tax experts said.
“Clearly explain the reason for your objection, and attach supporting documentation, such as invoices, proof of payments, or bank statements.”
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