Do You Owe SARS? Here's What Happens If You Don’t Pay Your Taxes in South Africa
Do You Owe SARS? Here's What Happens If You Don’t Pay
If you’re like most people, the idea of owing SARS is enough to make your stomach drop. Owing money to the South African Revenue Service (SARS) is not something anyone wants. But sometimes life happens: maybe you missed a deadline, didn’t file on time, or didn’t have enough cash flow to cover your tax bill. If you currently owe SARS — or you’re worried you might — you’re not alone.
But here's the kicker: not paying SARS can have serious consequences. In this blog post, we’ll walk you through what happens if you don’t pay your taxes, the steps SARS might take, and how you can get back on track.
💰 What Does It Mean to Owe SARS?
Owing SARS means you have an outstanding tax debt. This can happen if:
- You underpaid your taxes
- SARS issued an additional assessment after reviewing your return
- You were auto-assessed and didn't respond
- You didn’t submit your return, and SARS estimated your tax liability
- You earned extra income (like from a side hustle or freelance work) that wasn’t taxed
If your tax return says you owe SARS, you’ll see a balance due on your SARS eFiling profile.
📬 What Happens If You Ignore a SARS Tax Debt?
Ignoring your tax debt won’t make it disappear — in fact, it usually makes things worse. Here’s what SARS is legally allowed to do:
⚠️ 1. Penalties and Interest Accrue
SARS charges:
- Monthly interest on your outstanding tax debt
- Penalties for late payment or failure to submit returns
- Additional administrative penalties for non-compliance
This means the longer you wait, the more expensive your debt becomes.
⚠️ 2. Final Demand Letters
SARS will send you a final demand to pay your debt within a specific timeframe — usually 10 business days. If you don’t respond or make arrangements, SARS can escalate the matter without going to court.
⚠️ 3. Third-Party Appointments (Garnishee Orders)
If you don’t settle your tax debt, SARS can issue a third-party appointment. This allows them to collect money directly from:
- Your bank account
- Your employer (through salary deductions)
- Any third party that owes you money
Yes, SARS can legally take money without your permission.
⚠️ 4. Asset Seizure or Legal Action
If the debt is large or persistent, SARS can apply to the courts for a civil judgment and seize:
- Movable property (cars, equipment, etc.)
- Immovable property (your home or land)
While this is rare for small amounts, it’s a real risk for high-value debts or repeat offenders.
⚠️ 5. Blacklisting and Credit Impact
While SARS doesn’t report directly to credit bureaus, once legal action is taken and a judgment is issued, it can appear on your credit report, which affects your ability to get loans, rent property, or apply for credit.
🔄 Can You Negotiate With SARS?
Yes! If you’re unable to pay your tax debt in full, SARS allows you to apply for:
- A Payment Arrangement – You agree to pay the debt in instalments over time.
- Compromise Agreements – In special cases, SARS may agree to settle for less than the total owed if you can prove financial hardship.
- Deferred Payment – If you can’t pay now but expect to later, SARS may allow a grace period.
These options require honest disclosure and supporting documents, so it’s wise to work with a registered tax practitioner.
✅ What You Should Do If You Owe SARS
- Don’t ignore the notice – Log in to eFiling or the SARS MobiApp and check your balance.
- Request a statement of account (SOA) – Understand exactly what you owe and why.
- Contact SARS or a tax practitioner – Get help early to avoid escalating the situation.
- Apply for payment relief – If you can’t afford to pay all at once, ask for a structured payment plan.
🧠 Final Thoughts
Owing SARS is stressful — but it’s manageable if you take action early. Whether it's a small oversight or a major debt, burying your head in the sand will only make it worse. SARS has a lot of power to collect outstanding taxes, but they also have processes in place to help taxpayers who are struggling.
So don’t panic — just act.
Need Help?
If you’re unsure about how much you owe or how to deal with SARS, a registered tax practitioner can help you understand your options and avoid legal trouble.