Many South Africans feel overwhelmed when they think about tax—especially if there’s a possibility that they owe money to the South African Revenue Service (SARS). The natural instinct for some is to avoid the problem and hope it goes away. But when it comes to SARS, doing nothing is the most damaging choice you can make.
If you’re worried about outstanding tax, or know you simply cannot afford to pay what you owe, there are still constructive steps you can take. Let’s unpack what happens when you ignore SARS, why you don’t want to become tax non-compliant, and the options you have to protect yourself.
First Things First: Do You Owe SARS?
If you’re not sure whether you owe tax, the best step is to check directly with SARS. You can do this by:
- Sending an SMS
- Contacting SARS via email
- Calling the SARS Contact Centre
Even if you suspect you might owe, find out as soon as possible. The longer you wait, the more expensive the problem becomes due to penalties and interest.
The Cost of Doing Nothing
If you fail to file your tax return when you are required to, SARS doesn’t just ignore it—they impose penalties. These penalties range between R250 and R16 000 per month, depending on your taxable income. The penalty applies for each month your return is outstanding, up to 35 months. That can add up to a staggering bill.
On top of penalties, SARS charges interest on unpaid tax. This interest is market-related, calculated daily on your outstanding balance, and compounded monthly. In other words, the longer you delay, the more your debt snowballs.
SARS Can Still Assess You
Not filing a tax return doesn’t mean you “fly under the radar.” SARS has the legal authority to raise an estimated assessment of the tax they believe you owe, even if you haven’t filed.
And SARS doesn’t make these estimates blindly. They have access to extensive data sources—bank records, property deeds, vehicle registrations—and can even appoint tracing agents to find you.
If SARS believes you owe, they can instruct third parties like your bank or your employer to deduct money directly from your salary or account. At that point, you lose control of your finances.
Paying Tax is the Law
Failing to pay tax isn’t just a financial issue—it’s a criminal offence.
You can’t plead ignorance. Taxpayers are legally responsible for ensuring SARS has their correct details. If you’ve moved or changed numbers and didn’t update your profile, that’s on you.
The good news? Updating your contact and banking details can usually be done quickly on the SARS eFiling website, without having to stand in line at a branch.
What Happens If You Don’t Pay?
If you owe SARS money, you generally have until the end of the month after assessment to settle your account. If you don’t, here’s what happens:
- Reminders are sent – SARS will prompt you to pay.
- Final Letter of Demand – If you still don’t pay, SARS issues this notice giving you 10 days to act. You can either:
- Pay the debt
- Request a payment plan or deferral
- Negotiate a compromise (where SARS may write off part of the debt)
- Lodge a dispute
If you apply for a payment arrangement, compromise, or dispute, you must also request a suspension of payment—otherwise SARS can continue collecting.
Ignore this stage, and things escalate quickly.
SARS Debt Collection Powers
SARS’s internal debt management team has powerful tools at its disposal:
- ITA88 deductions – SARS can instruct your bank, employer, retirement fund, or even your clients to pay them directly. These third parties cannot refuse without risking penalties themselves.
- Civil judgment – SARS can obtain a court-certified statement, enabling sheriffs to seize and auction your assets. This damages your credit report.
- Offshore assets – Even money held abroad isn’t safe. SARS can apply to have it repatriated.
- Liquidation or sequestration – In severe cases, SARS can apply to have your estate liquidated.
- External debt collectors – If SARS’s own team fails, your account may be handed to professional debt collection agencies with broader legal powers.
Why You Don’t Want to Be Tax Non-Compliant
Tax debt affects more than your bank account. Without a tax compliance certificate, you may find yourself unable to:
- Access your retirement funds under the two-pot system
- Buy foreign currency or transfer funds abroad
- Invest offshore
- Obtain visas or residency permits for other countries
- Apply for or renew a professional licence (for accountants, lawyers, advisers, etc.)
- Sell or transfer property
- Receive tax refunds you may otherwise be entitled to
- Tender for government business contracts
- Secure financing from a bank
And yes—your credit score will take a hit, making it harder to access credit or loans.
Why You May Be Incurring Tax Debt
Even if you’re paying Pay As You Earn (PAYE) through your employer, you may still owe SARS tax. Here’s why:
- Additional income: Rental income, side hustles, consulting work, and investment returns aren’t automatically covered by PAYE. If you don’t declare them, you may owe SARS.
- Provisional tax: If you earn income outside of a salary, you may be required to register as a provisional taxpayer. This means paying tax in advance twice a year, instead of waiting until year-end.
- Unreported income: Failing to declare freelance, business, or rental income can cause tax debt to accumulate over time.
You can register for tax and eFiling here: SARS eFiling Registration.
What To Do If You Can’t Pay
If you realise you owe SARS but can’t pay, don’t panic—and don’t ignore it. You have options:
- Contact SARS immediately – Don’t wait for a final letter of demand.
- Negotiate a payment arrangement – Spread your tax debt over a period of months or years.
- Request a compromise – In exceptional circumstances, SARS may write off part of your debt.
- Dispute an assessment – If you believe SARS has calculated incorrectly, you can formally challenge it.
Taking action, even if you can’t pay in full, shows willingness to comply. That can protect you from the most damaging consequences.
The Bottom Line
Owing SARS money is stressful, but ignoring the problem makes it worse. Penalties, interest, asset seizures, garnished salaries, and even criminal charges are all real consequences of inaction.
The smartest thing you can do is face the problem head-on. Whether you need clarity on your tax position, extra time to pay, or professional help to negotiate with SARS, take the first step.
Remember: paying tax is the law—but how you manage your tax debt is within your control. By acting early, you’ll reduce costs, protect your credit, and keep control of your financial future.
Struggling with Tax Debt? We can help – please get in touch
WhatsApp: +27 82 858 3919
Call: +27 71 360 0018
Email: mari@mmbaccounting.co.za
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