Taxpayers are required to be fully compliant in all their tax matters by submitting and paying their taxes on time. If taxpayers are not compliant or have outstanding tax debt the SARS Debt Management department is committed to assisting businesses and individuals to become fully compliant. There are a few avenues that SARS uses to assist in this regard.
How much do I owe?
By running your compliance status, you should be able to get a glance of how much you owe SARS. If you are not 100% certain how much you owe SARS, you will need to contact them on their call centre to enquire of your outstanding balances. If you stay not far away from a SARS branch, a visit to the SARS branch would not kill. When you visit, just ensure you have all your particulars with you to avoid being turned away. Lastly, if you were registered for e-filing, run a statement of account to see how much you owe SARS. Your next step is to make the outstanding payment to SARS. Contact SARS or your tax practitioner to help you load a payment that can then be released from your bank account.
What if I can't pay the outstanding amount now?
Every taxpayer must be aware that it is best practice to always file tax return on time in order to avoid penalties and interest. But, if you are currently unable to pay your taxes, please contact SARS without delay. The following options may be available to you:
Under certain circumstances SARS can reach an agreement with a taxpayer to defer a tax debt for later payment or for payment by instalments. A deferred payment arrangement is s when a taxpayer can not settle the full amount owing to SARS immediately and they want to apply for a payment plan to settle the debt. Under this option:
- SARS has the option to decline the request.
- Interest will accrue on any unpaid debt.
- If you don't adhere to the conditions of the payment arrangement the payment agreement will be terminated and normal collection proceedings will resume.
- The taxpayer must suffer from a deficiency of assets or liquidity, which is reasonably certain to be remedied in the future.
- Notwithstanding this deficiency, the taxpayer must anticipate that there will be income or other receipts which can be used to satisfy the tax debt.
- At the time of concluding the agreement the prospects of collecting the tax debt must be poor or uneconomical, but likely to improve in the future.
Moreover, the deferral should not prejudice the collection of the tax debt
In certain circumstances, a compromise may be requested on a taxpayers' outstanding tax debt. A SARS Debt Compromise is a process whereby a taxpayer requests that SARS permanently "write-off" a large portion of their debt, with the balance being paid in full by the taxpayer immediately on the condition that the taxpayer complies with any conditions as may be imposed by SARS.
A compromise cannot be considered if the taxpayer disputes the debt. Therefore while a matter is under objection or appeal, a compromise cannot be considered. If the taxpayer wants to compromise he has to withdraw his objection or appeal.
If you are not in agreement with your tax debt, you may lodge a dispute. To lodge a dispute please go to objections and appeals. Even though you are disputing the tax debt you remain under obligation to pay the debt whilst your dispute is being handled.
Originally published July 10, 2019
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.