Trouble for anyone playing fast and loose with SARS

SARS is getting clever about recovering some R700 billion owed in tax receivables. More than half of this is owed by just 1 690 debtors. Essentially, amendments to the Tax Administration Act allows SARS to appoint a third party. These can be anyone from your employer, bank, asset manager and even your medical aid, withholding and paying the outstanding debt on your behalf.

SARS TAX DEBT COLLECTION

As such, SARS can appoint anyone who holds money or property on a taxpayer’s behalf. This includes:

• Employers.
• Banks and other financial institutions.
• Attorneys.
• Medical aid schemes.
• Investment managers and insurers.
• Anyone who owes the taxpayer money.

However, the appointment can only be made if the revenue service has identified who holds the funds. There can be no ongoing dispute over the debt, and the taxpayer must have received a final demand and didn’t comply. Furthermore, SARS says it might not necessarily seek the full balance owing, but only a portion.

WHEN DID SARS CHANGE THIS?

In turn, SARS has revised the taxpayer schedule so employers have more time to load AA88 deductions before payroll closes. It says this will reduce repeated appointments and cancellations, which employers have found a hassle.

• In the 2025/26 tax season, gross collections were R2.4 trillion. After R457.9 billion in refunds, net revenue was a record at over R2 trillion.
• So far 2026/27, SARS has collected R992 billion in net revenue, which is R1.2 trillion in gross collections less R240 billion in refunds. That’s some 7.3% higher than the previous year.

WHAT’S NEXT FOR TAX SEASON?

SARS is using data from banks, employers, medical schemes and investment platforms to flag mismatches between declared income and actual financial activity. Flagged cases can move quickly from engagement to enforcement, so be careful. Here are this season’s remaining tax deadlines to note:

• Saturday 31 October 2026 (just passed): Employer interim reconciliation (EMP501) submission window closes.
• Friday 22 January 2027: Filing date for provisional taxpayers and trusts.

Basically, if you owe SARS, don’t ignore a final demand. Arrange a payment plan or lodge a dispute before an appointment is made. Because, after that, your employer might get a message from the revenue service asking to make the required deduction anyway …

But what do you think? Do you think this is a good initiative from SARS? Or does this cross a line and they’re getting too greedy? Please share your thoughts in the comments section below …