The South African Revenue Service (Sars) is “aggressively” collecting outstanding tax debt, including by withdrawing funds from bank accounts and garnisheeing salaries, according to Andre Daniels, legal manager: tax controversy and dispute resolution at Tax Consulting SA.
Usually, the first step by Sars to collect an outstanding debt is to issue a letter of demand or make a third-party appointment, Daniels says.
If a letter of demand or third-party appointment is issued against you, you should not bury your head in the sand or become frozen with fear and do nothing. This will not aid you cause but only lead to Sars commencing with collection procedures in terms of the Tax Administration Act (TAA), leaving you with little to no recourse, Daniels says.
A third-party appointment is not a Sars official collecting a debt but is Sars appointing a third-party in terms of section 179 of the TAA, such as the taxpayer’s bank or employer, to withhold and immediately pay over to Sars all available funds per the terms stipulated on the notice of third-party appointment.
If the third-party fails to adhere to the appointment, it may result in the third-party being held personally liable to Sars, and it may be convicted of a criminal offence, he says.
Taxpayers who find themselves in the above position should engage the services of a tax attorney, who can ensure that the legal process is properly followed in addressing the alleged tax debt owed to Sars, Daniels says.