When there is a dispute raised by a taxpayer about the SARS’ assessment of a tax due to it, South African tax law follows the ‘pay now, argue later’ principle. According to this principle, if a taxpayer has a dispute, the payment of that tax is not suspended ending resolution.
The Tax Administration Act, however, allows taxpayers to apply to SARS to suspend the payment of a disputed tax, pending the outcome of the dispute. If SARS refuses the suspension, the taxpayer may opt to have the decision reviewed in terms of the Promotion of Administrative Justice Act. The problem with this, is that the review often takes several months.
Another option for taxpayers is to approach a court and apply for an urgent interdict to suspend the payment. Urgent interdicts are notoriously difficult to obtain in these circumstances. On 31 August, however, the Pretoria High Court granted an urgent interdict against SARS, preventing it from collecting over R 1 billion of tax, pending a review of the assessment. This rare judgment shows that it is possible –depending of course on the circumstances – to both “pay” and “argue” later.