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

South African taxpayers with debts as small as R5,000 may face collection actions from the South African Revenue Service (SARS). This intensified effort includes taking money directly from bank accounts or deducting funds from salaries. Jashwin Baijoo, a partner at Tax Consulting South Africa, explained that SARS is targeting smaller outstanding amounts, not just those with large debts. SARS can issue a final demand letter for R5,000 debts and pursue further enforcement if taxpayers do not respond.

This aggressive collection drive has been ongoing for the past 18 months. South Africa's total outstanding tax debt now exceeds R600 billion, with about R280 billion considered collectable. SARS Commissioner Johnstone Makhubu disclosed that the revenue service aims to collect R126 billion from recoverable tax debt. He cautioned against taxpayers abusing relief mechanisms meant for those genuinely unable to pay, as these programmes should not lead to fiscal leaks.

Under Section 179 of the Tax Administration Act, SARS can appoint third parties like banks or employers to recover outstanding taxes without a court order, provided they follow statutory preconditions such as delivering a final demand 10 business days in advance.

Taxpayers receiving a final demand typically have 10 business days to address the debt. They can pay the amount, set up a payment arrangement, contest the assessment, or apply for a compromise if they qualify. Qualifying taxpayers can arrange installment payments, though interest may still accrue. Those facing serious financial hardship can apply for a compromise, accepting less than the full debt, but must prove their financial situation.

However, nearly 90% of expedited debt compromise applications were rejected in 2025 due to applicants' inability to demonstrate genuine hardship. Even when applicants acknowledged the debt but claimed they could not afford to pay, they were often rejected. Taxpayers with disputes over assessments must provide strong grounds, as weak arguments can weaken their appeal. SARS advises taxpayers to contact the revenue service before collection actions intensify.