n Journal for Juridical Science - Reconsidering the “pay now, argue later” approach of South Africa in relation to disputed taxes – lessons from Canada and Australia

Volume 44 Number 2
  • ISSN : 0258-252X



The Davis Tax Committee has labelled the South African Revenue Service’s (SARS) approach of “pay now, argue later”, when a taxpayer disputes an assessed tax obligation, as controversial. This article first points out the controversy surrounding this approach, by indicating the impact this approach may have on taxpayers’ rights to access to courts, just administrative action and not to be arbitrarily deprived of property. Thereafter, the article contributes to the current discourse by considering the approaches of Canada and Australia in relation to an assessed payment obligation pending dispute resolution. Bearing in mind the approaches in Canada and Australia, it is suggested that, in South Africa, the payment obligation pending dispute resolution should be suspended until the dispute has been adjudicated by an impartial forum. This will ensure that a taxpayer’s right to access to courts is respected. Nonetheless, the South African context, more specifically the overburdened court system, must be considered. Waiting until an impartial forum is able to consider the merits of the dispute may take a substantial amount of time. This will unnecessarily stifle SARS’s collection powers and interest will continue to accrue to the detriment of the taxpayer. Accordingly, it is suggested that 50 per cent of the payment obligation relating to the disputed tax should be suspended, until the matter is adjudicated by an impartial forum.

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