Think SARS only targets big fish? Even R5,000 could see money taken from your account

South Africans owing the taxman as little as R5,000 could face debt collection action, including deductions from their bank accounts or salaries, as the South African Revenue Service (SARS) intensifies efforts to recover outstanding taxes.

Jashwin Baijoo, partner and head of strategic engagement and compliance at Tax Consulting South Africa, warned that SARS is increasingly pursuing smaller outstanding amounts rather than concentrating only on taxpayers with substantial debts.

According to Baijoo, SARS can issue a letter of final demand for debts of R5,000 and pursue further enforcement action if taxpayers fail to respond. "This has become a massive collection drive, almost strike action, from SARS in the last 18 months," he said during an online masterclass on tax debt and dispute resolution.

The tougher approach comes as South Africa's outstanding tax debt exceeds R600 billion, of which approximately R280 billion has been identified as collectable.

Don't abuse

According to Tax Consulting South Africa's account of the recent South African Institute of Taxation (SAIT) Tax Indaba, SARS commissioner Johnstone Makhubu said the revenue service was targeting R126 billion in collections from recoverable tax debt.

Makhubu also warned against taxpayers abusing relief mechanisms intended for those genuinely unable to settle their liabilities. The commissioner, it said, warned during the recent South African Institute of Taxation Tax Indaba 2026 that these mechanisms should not result in fiscal leakages because taxpayers are attempting to “play games” with programmes aimed at providing legitimate relief.

SARS can collect directly from your bank

Under Section 179 of the Tax Administration Act, SARS can appoint a third party, including a bank or employer, to recover outstanding taxes from money held on behalf of a taxpayer.

This means that, subject to the applicable legal requirements, SARS can instruct a bank to transfer money from a taxpayer's account or require an employer to deduct money from their salary.

No court order

A court order is not required for this particular collection mechanism; however, SARS must comply with statutory preconditions, including a final demand delivered at least 10 business days beforehand.

SARS confirms in its official guidance that third-party appointments generally follow a letter of final demand where a taxpayer has failed to settle an outstanding debt.

The revenue service can also pursue civil judgments, attach assets and, in certain circumstances, institute sequestration or liquidation proceedings.

What happens if you receive a final demand?

Baijoo warned that taxpayers should act quickly after receiving a final demand, which generally gives them 10 business days to address the outstanding debt. Depending on their circumstances, taxpayers can settle the amount, request a payment arrangement, dispute the assessment or apply for a compromise.

Instalments 

SARS allows qualifying taxpayers who cannot pay immediately to arrange instalments, although interest may continue accumulating on outstanding amounts. Those experiencing serious financial hardship may also apply for a compromise, under which SARS can agree to accept less than the full debt.

However, applicants must provide evidence of their financial circumstances.

Tax Consulting South Africa reported that Makhubu told the Tax Indaba that almost 90% of applications under an expedited debt compromise process introduced in 2025 had been rejected because applicants could not demonstrate genuine financial hardship.

In some cases, bank balances indicated that applicants could afford considerably more than they had offered to pay.

No vanishing act

Tax Consulting South Africa explained that taxpayers seeking debt relief acknowledge the amount owed but cannot afford to pay it, while those who believe an assessment is incorrect can dispute it.

Taxpayers who believe an assessment is incorrect can lodge an objection, but doing so does not automatically suspend their obligation to pay. They may separately request a suspension of payment while the dispute is considered.

André Daniels, head of dispute resolution at Tax Consulting SA, also warned that taxpayers need properly supported grounds for objections, as weak arguments can undermine subsequent appeals. SARS advises taxpayers who cannot settle their debts to contact the revenue service before collection proceedings escalate.

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