Guide · SARS disputes
Section 164 suspension of payment: how to stop SARS collecting a disputed debt
- Registered tax practitioner, Cape Town CBD
- CFP® · Registered Tax Practitioner (SARS) · CIBA member (SAIBA6662)
- In practice since 2011
In short: objecting to a SARS assessment does not stop SARS from collecting the tax. Section 164 of the Tax Administration Act lets you ask SARS to suspend payment of the disputed amount until the objection or appeal is decided. Once you have asked, SARS generally may not take collection steps until 10 business days after it tells you its decision, unless it believes the debt is at risk. Apply as early as possible, ideally with or before your objection.
The "pay now, argue later" rule
The Tax Administration Act says the obligation to pay tax, and SARS's right to collect it, is not suspended just because you object or appeal. Without a suspension, SARS can treat the amount as an outstanding debt: it can charge interest, offset refunds, and appoint a third party such as your bank or employer to pay it directly from your funds.
Section 164 is the safety valve. It allows a senior SARS official to suspend payment of the disputed tax, in full or in part, while the dispute runs.
When you can apply
- When you intend to object, have objected, or have appealed against an assessment
- For the disputed amount: tax you accept as correct should still be paid
- Before collection starts, ideally, though you can still apply once it has
What SARS considers
Section 164(3) lists the factors a senior SARS official must have regard to, including:
- Whether recovery of the disputed tax will be in jeopardy, or there is a risk that assets will be dissipated
- Your compliance history with SARS
- Whether fraud is prima facie involved in the origin of the dispute
- Whether paying now would cause you irreparable hardship that isn't justified by the prejudice to SARS or the fiscus if the tax is not paid or recovered
- Whether you have tendered adequate security for the disputed tax, and whether accepting it is in the interest of SARS or the fiscus
A strong request addresses each relevant factor with facts and documents, not just a statement that you disagree with SARS.
How to apply
- Identify the disputed amount precisely, per tax period.
- Lodge the request for suspension of payment on eFiling (or through the channel SARS specifies), referring to your objection or appeal.
- Set out your grounds against the factors above, with supporting documents such as financial statements, bank statements and a summary of your objection.
- Offer security if appropriate, which can strengthen the request.
- Keep proof of submission: the date matters for the protection against collection.
What happens next
SARS may grant the request in full or in part, refuse it, or ask for more information. If it is granted, SARS should not collect the suspended amount while the dispute is pending, although interest continues to accrue on any tax that is finally confirmed as due. Under section 164(5) SARS can revoke a suspension with immediate effect if it is satisfied that the objection or appeal is frivolous or vexatious, that you are employing dilatory tactics, that on further consideration the suspension should not have been granted, or that there has been a material change in any of the factors above.
If your objection or appeal fails, the suspended amount becomes payable, with interest. If it succeeds, the assessment is reduced and the suspended amount falls away.
Section 164 questions
Can SARS take money from my bank account while I'm objecting?
Yes, if payment hasn't been suspended. SARS can appoint your bank or employer as a third party to pay the debt. Asking for suspension under section 164 generally prevents collection steps until 10 business days after SARS gives its decision, unless SARS believes the debt is at risk.
Do I have to pay the part of the assessment I agree with?
Yes. Suspension applies to the amount in dispute. Paying the undisputed part shows good faith and supports your request.
Does interest stop if payment is suspended?
No. Interest continues to accrue on any amount that is eventually confirmed as owing. If your dispute succeeds, the amount falls away together with the interest on it.
What if SARS refuses my request?
The disputed tax then becomes collectable. You can arrange payment terms with SARS debt management, provide further information and ask again if circumstances change, or in appropriate cases challenge the decision. We advise on the best route for your matter.
Talk to a registered tax practitioner
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