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Of the 4.34 million personal assessments raised by SARS in 2020, 12% gave rise to objections from taxpayers. Despite perceptions that SARS is targeting every taxation avenue available to collect funds for the fiscus, experts in our industry agree that it continues to operate within the ambit of the Tax Administration Act.  Taxpayers finding themselves on the receiving end of letters of demand from SARS for unpaid income tax would, however, disagree. 
income tax
In our experience, disputes with SARS are increasingly arising due to:
  1. Accepting SARS auto-assessments on eFiling without verifying the accuracy thereof.
  2. Taxpayer miscalculations, incorrect disclosures or other errors made in submitting income tax returns.
Whereas legitimate disputes with SARS do arise, these are generally found in the case of more complex provisions of the Income Tax Act and interpretation thereof, such as:
  • Complicated estates and trusts
  • Implementation of new rules or adjustments
  • Foreign currency earnings or transactions
  • Working abroad
  • Complex business engagements
The reality of the situation is that SARS is permitted under the Tax Administration Act to levy penalties and interest on incorrect submissions or taxation owed by the taxpayer.  By not acting on SARS final letters of demand or attending to tax debts owed to SARS, matters can quickly and unnecessarily escalate.  Such disputes could be avoided by following the correct dispute procedures as set out by the Act and by exercising caution in the completion of income tax returns. 

Here’s what you can do in order to avoid disputes with SARS:

  1. Before you accept an auto-assessment by SARS on eFiling, verify that the information therein is accurate and complete.
  2. If you disagree with any information in the auto-assessment, do not accept it.
  3. Engage an income tax professional to complete and file your income tax returns on your behalf.
  4. If you dispute the assessment raised by SARS, ensure that you object within the required timeframe communicated on eFiling.
  5. Avoid engaging SARS in disputes without first obtaining the advice of a tax professional.
The MMS Group serves South African taxpayers, including individuals, companies and trusts, across all aspects of taxation, including income tax.  If you require advice to file your returns, speak to a MMS Tax Consultant.